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Owners active, former EE has account: 1 partic plan?


BG5150

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I don't know why I'm blanking on this, but we have a client where the only active "employees" are the husband and wife owners.  There is one former employee who still has an account.

Is this considered a 1-participant plan?

MY gut says no, because I would think that the existence of that third account would require bonding of some sort.

QKA, QPA, CPC, ERPA

Two wrongs don't make a right, but three rights make a left.

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2 hours ago, Belgarath said:

Right, not a 1-participant plan.

A nice way of saying "participant" does not equal "employee" ?  ?

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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  • 5 months later...

Same facts as above, but with a twist. How about if an employee was eligible to contribute during 2020 but didn't and then terminated before the end of the year? The plan "technically" didn't cover this employee, so could the plan file a Form 5500-EZ? Or does the fact that another employee was eligible kick them into Title I coverage?

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