Leaderboard

Why is all of this analysis and repartee necessary to come to the obvious conclusion: the auditor doesn't know what he/she is talking about.

Offhand, it sounds like revenue sharing is paying the other expenses. Comparing the expense ratios of the funds in the plan to the expense ratios of the institutional share class of the same funds might give some insight. And yes, ESOP Guy is right.

If the Plan Document says something about deferral elections for rehires, then do what it says. In any case, as hr for me says, check on what, if anything, the payroll processing system does. Whatever the procedure you end up using, make a note of it so that the Participants and you and your successors know what to expect. For example, it could be a note on or with the election form that says, "If your employment with our fine company terminates, your deferral election becomes void. If you are later rehired, your deferral election will be the default deferral rate in effect at that time unless you file a different deferral election." or "Your deferral election will change only when you file a new deferral election. Changes in your employment status do not change your deferral election."

Would they qualify under 29 CFR 2520.104-50 to wait until next year to attach? There would still be some requirements to satisfy, but it sure sounds like a 2-consecutive plan year period with one of the two plan years being less than 7 months long. The 2015 5500 filling would have to include an accountant's report covering both the short 2014 plan year and the full-length 2015 plan year. Would that help?

I agree. Exactly what I was thinking. Absolutely no way is it reportable.