Leaderboard

I had a plan that remained open until the last person was paid. I don't recall the PBGC having any issues with it. I believe we sent them a letter and informed them all participants were paid, and that was it.

You have two separate applications here: (1) the definition of eligible employee in the plan document and (2) how you do your coverage and nondiscrimination testing. Say you have a M&A transaction and the definition of eligible employee is simply any employee of the employer within the control group. The transition rule doesn't help you and those new/merged employees are now eligible (and maybe immediately if prior service was required to be counted), which is why that language now shows up in most (all?) preapproved documents. You can choose whether or not to apply the transition rule in your testing, but you have no after-the-fact option on the documents definition of eligible employee.