ADP/ACP statutory minimum age 21 with one year of service, but what ar

[Guest Kevin Plymyer]

I have a client that has no elligibility requirements. Participants enter the plan on the first of the month coinciding with or next following their date of hire. When the ADP/ACP test is run I can restructure the plan to use the statutory minimum age or service eligibility conditions (age 21 and one year of service). My question is can I go as far to say that I will use semi entry dates versus the currently monthly entry dates? I know if you use age 21 with 1 year of service you must provide at least 2 entry dates. If someone knows where I can find some information on this question I would love to know. So far everything I read does not mention anything about the entry dates. Should I presume that since it is not mentioned there should be no change to the plans entry dates when applying the statutory minimums?

[imchipbrown]

You imagine that you drafted the plan with the meanest eligibility requirements possible; age 21 and one year. Entry date would be twice a year. Or one entry date nearest completion of the Year of service.

[Guest Mr. X]

Chip, it is not as clear as that, and there are differing opinions as to the proper approach. Some will say that the semi-annual entry dates are considered, others will say that only the one year of service requirement is considered, and this is within the IRS. I personally feel it is acceptable to use the former approach, but would advise anyone to proceed with caution.

[rcline46]

From the 1999 ASPA convention, question 76. There are two answers. If you are using permissive disaggregation, that is splitting the plan into two plans for testing, then you can use the 21/1year/dual entry requirements.

If you are using the new rule effective in 1999 which allows you to only exclude NCEs who have not reached 21/1year then you must use the entry dates as specified in the plan.