Pammie57 Posted February 2, 2022 Share Posted February 2, 2022 A 401k plan terminated on 4/25/2021. All participants were paid out by 10/15/2021. The plan is /has been over 100 participants at time of termination due to a sale of the business. Do we as TPA just need to request census information through 4/25/2021 since all contributions ceased then or through a later date? like through 10/15/2021? I think it's through 4/25/2021 but the auditor is suggesting the latter date. Please give me opinions based on experience. Thanks! Link to comment Share on other sites More sharing options...
Bill Presson Posted February 2, 2022 Share Posted February 2, 2022 Assuming the termination resolution/amendment said that all contributions cease and no new people will enter after 4/25/21, then anyone hired after that date is irrelevant. The auditor is wrong. Luke Bailey, Pammie57 and ESOPMomma 3 William C. Presson, ERPA, QPA, QKA bill.presson@gmail.com C 205.994.4070 Link to comment Share on other sites More sharing options...
Ilene Ferenczy Posted February 3, 2022 Share Posted February 3, 2022 Bill's answer is likely correct, but i wanted to point to another issue that he did not address. What kind of business transaction was it? If it was an asset sale and all employees went to work for the buyer, then they had no service after the sale and there is likely little information after your termination date. If it's a stock sale, then employment continues after the sale, and this point is moot. In that case, it just depends on what the plan and the termination documentation say about the accrual of rights after the termination of the plan. Bill Presson, ugueth and Pammie57 3 Link to comment Share on other sites More sharing options...
Nate S Posted February 3, 2022 Share Posted February 3, 2022 On 2/2/2022 at 11:01 AM, Pammie57 said: A 401k plan terminated on 4/25/2021. All participants were paid out by 10/15/2021. The plan is /has been over 100 participants at time of termination due to a sale of the business. Do we as TPA just need to request census information through 4/25/2021 since all contributions ceased then or through a later date? like through 10/15/2021? I think it's through 4/25/2021 but the auditor is suggesting the latter date. Please give me opinions based on experience. Thanks! I'll second what Bill said, but add that even if the amendment and/or resolution didn't address the cessation, then the plan document may include default language to the same in the event of termination. Most likely there is language in there about the creation of a short-limitation year. In any case, explain it to the sponsor and have them give you direction to only use data through 4/25; then share that direction with the auditor. The auditor has ZERO authority over the compliance testing; but some tend to think that just because they are supposed to confirm that it was done, that they are somehow supposed to confirm that it's correct. Pammie57 and ugueth 2 Link to comment Share on other sites More sharing options...
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