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Hey - just wanted to say that if any of you are in the path, or on the fringes, best of luck. Not much to do except hope for the best, I guess.

Are dictators elected?

Actually had a plan sponsor do this for a few years. I kept telling them it wasn't required but it wasn't until the third year that my words actually hit home that they were spending $10k they didn't need to spend.

But, Mike, isn't it only that the termination is not a distributable event (and in this case there is nothing to distribute) if you start up a new plan?

It happens.

the odd part is even if the 80/120 rule did apply (which to be clear I agree it doesn't) the rule isn't mandatory. If you have under 100 participants in the past you can wait until you reach 120 before you are required to get an audit There is nothing stopping you from getting the audit as 101 participants. (I guess there is nothing stopping you from getting an audit at 50). Most people just don't want to spend the money for an audit if it isn't required but you aren't required to file as a small plan even under the rule.

Agreed, that is interesting. Likely, there is some practicality behind the reasoning, or some lobbying. Nevertheless, it seems to be overkill to worry about "appointment" vs. "termination", etc. Hakuna Matata.

We can discuss legality all day, but the reality is that auto enrollment is complicated enough for Sponsors. No way I'd have 2 sets of criteria--I say pick one & let them make their elections.

The statutory exclusion requires more than just nonresident alien status for the person to be excluded. From the OP, this person has US source income and would not be excluded.