Rehired former participants & beginning of the year participant co

[R. Butler]

I am trying to determine whether an Audit is needed for a Profit Sharing Plan. Plan Year is calendar year and has one entry date (01/01). Plan document provides that generally, rehired former Participants become Participants immediately upon rehire.

Assume former Participants are rehired during 2001; such Participants did not have account balances at 01/01/01. Are such Participants considred participating at the beginning of the year for Audit purposes. I am hoping that since they weren't employed at 01/01 that the answer is no, however, I am bothered by the fact that the Plan has only one entry date. Are such participants deemed to have retroactively entered as of the first day of Plan Year?

[Richard Anderson]

My interpretation of these facts is that a former participant that is rehired on say 5/1/01 would enter the plan on 5/1/01, not 1/1/01. I believe the immediate participation language overrides the plan entry dates.