80-120 Rule: 53 participants at 1/1/00 and 117 at 1/1/01?

[Guest Robin Vatalaro]

I am having a brain lapse. If a plan has 53 participants at 1/1/00 and 117 at 1/1/01 - does the plan get out of the audit requirement (assuming the other small plan audit exemption requirements are met - they are in this case)?

My confusion lies in the "between 80 and 120" language. The plan was not between 80 and 120 at 1/1/00 but is at 1/1/01 - since they went over 100 at 1/1/01 I'm concerned. Can't find anything on point in 5500 instructions or by searching Benefitslink.

Thanks for any help.

[Guest b2kates]

Yes, the plan will be exempt and in the 80-120 rule (if otherwise exempt).

I hope I state this correctly, the 80-120 rule exempts plans from audits if in the prior year there was no audit required and in the current year there are no more than 120 participants.

Prior year 53 Part. no audit, current year 117, less than 120; no audit.