restatement to change plan year end

[M Norton]

large MPP plan, single employer - sponsor has 52/23 week fiscal year ending Saturday closest to 11/30. 

The plan document has had the same fiscal year as the sponsor.  The 2014 Form 5500 was filed for PYE 11/28/2015.

Plan sponsor changed TPAs; new TPA amended the plan to be 11/30 year end, although plan sponsor still has 52/53 week fiscal year. 

2015 Form 5500 prepared by new TPA shows plan year dates 12/1/2015 - 11/30/2016. 

What happens to the two days between the end of the 2014 plan year and the beginning of the 2015 plan year?  Should the 5500 just cover those days and state the plan year is 11/29/15 - 11/30/16? 

Same question for audited financial statements.

Thanks.

[CuseFan]

When was the amendment prepared and adopted? If it was after 11/30/2015 then it was not permissible because no matter how you slice it there is a PY that began 11/29/2015, so the only way to change to a fixed 11/30 PYE was to amend on or before 11/30/2015 and to have a two day short plan year. I'm not aware of any exception here that would allow you a 367 day plan year - same with 5500.

My burning question is whether this was a conscious decision by the plan sponsor (doubtful) or an oversight by the TPA? That sort of specific language is tough to miss. Was is it just TPA laziness? Remember, people, certain plan provisions are there for the benefit and convenience of the plan sponsor and its participants, the convenience of the TPA is secondary.

[david rigby]

24 minutes ago, CuseFan said:

...so the only way to change to a fixed 11/30 PYE was to amend on or before 11/30/2015 and to have a two day short plan year. I'm not aware of any exception here that would allow you a 367 day plan year - same with 5500.

Technically, I think any change to plan year must be adopted prior to the new YE.  If you have a YE 11/28/15, the next PY begins 11/29/15, no matter what is the PYE.

[M Norton]

We do not have a signed copy of the adoption agreement, which has an effective date of 12/31/2015.

under IRC 441(f)(2)(B) Change in accounting period (under "Special Rules for 52-53-week year) it says "If such change results in a short period of less than 7 days, such short period shall...be added to and deemed a part of the following taxable year."

If I read that correctly, it seems they could have included those two days for the first year and made it effective 11/29/2015 with a plan year end of 11/30/2016.  But that is not what the adoption agreement says. 

FYI I have the same burning question you have.

Thanks.

[CuseFan]

17 hours ago, M Norton said:

under IRC 441(f)(2)(B) Change in accounting period (under "Special Rules for 52-53-week year) it says "If such change results in a short period of less than 7 days, such short period shall...be added to and deemed a part of the following taxable year."

Thanks M - I was not aware of this special rule, it makes sense (score one for the government!), and is helpful to know.