Can a new plan be a large plan?

[JButtrick]

I have a new DC plan in 2004. At year end there were over 2,000 participants. Although there were participants techinically eligible on 1/1/2004, there were no assets and no one had an account balance. There is an end of year requirement for an allocation. I would think that there we no participants on 1/1/2004 and certainly not on 12/31/2003

I don't find guidance in the 5500 instructions regarding new large plans. What I do read is that the large/small distriction is based on participants at the beginning of the year.

I would think that this is a small plan for the 2004 5500.

The major question is whether an audit is required. I would think NO.

Comments?

[E as in ERISA]

Were they earning creditied service on 1/1?

Page 16 of instructions http://www.dol.gov/EBSA/PDF/2004-5500inst.pdf

If they are earning any hours on 1/1 that would be counted toward vesting or allocation, etc. then they are participants on that day.

You don't need assets.

[JButtrick]

Since I didn't like the answer, I spoke to both EFAST & the DOL. They both agreed that if there were at least 100 participants eligible on 1/1, it didn't matter whether they had yet benefited (recieved an allocation) or whether there was any money in the plan. They still need an audit.