Amending Entry Dates

[Guest merlin]

A calendar year profit sharing plan has eligibilty requirements of 21/1, with entry on the 1/1 of the year in which the requirements are met. Client wants to amend the entry date to be the 1/1 (or 7/1) following 21/1. An employee was hired 10/18/2001. If the amendment isn't adopted by 10/18/2002 clearly she will enter under the old rules. What if the amendment is adopted before she has completed one year of employment? Can she be kept out until 1/1/03?

[MGB]

Wouldn't she still enter on 1/1/03 under the new rules?

[MGB]

Actually, in rereading this, I don't understand the old rules. How can she retroactively enter on 1/1/02 after completing one year?

[Guest merlin]

The present rules say that an employee enters the plan on the January 1 of the year in which the eligibility requirements are satisfied.Her 1st anniversary of employment will be 10/18/02. If she's still there at 10/18/02 she'll enter retroactively to 1/1/02.

[AndyH]

Merlin, I think you can do what you are proposing and she comes in 1/1/03, as long as the change is made before she has met the eligibility requirements.

[Guest merlin]

That's what I was thinking.There's no 411(d)(6) protection until she becomes a participant. It's kind of dirty pool,but I can't see where it's illegal.

[Blinky the 3-eyed Fish]

I just viewed Caddyshack again, and they thought they had a dirty pool, but it just turned out to be a candy bar.

[Guest merlin]

Blinky, I think you're right. It was a Tootsie Roll,as I recall.

[maverick]

I believe it was a Baby Ruth.

[Blinky the 3-eyed Fish]

Maverick is correct.

[Mike Preston]

McGath v. Auto-Body North Shore, Inc., 7 F.3d 665, 670 (7th Cir. 1993) stands for the proposition that you can amend the eligibility up until the day before someone actually enters the plan. As many times as you can. I think.