Small Plan Audit Question

[pbarrett]

We have an old ps plan with hub/wife holding assets in excess of $1,000,000. They have not made ps contributions in years. The funds were rolled in from an old DB. I realize they should have recurring deposits but that is not my issue here.

Question: Over the last few years they have hired employees. There are now 5 participants in the plan. The two HC's and 3 nhce's. The 3 nhce's have -0- balances.

There is no bond in place because the participants are not at risk. I would guess 80% of the assets are non-qualifying.

Is a bond and audit required? Again, if the intent of the reg is to protect the participants, we're fine. However, we are preparing 5500's versus 5500 EZs so I don't know if red flags are going to shoot up.

Any thoughts?

[WDIK]

Even though the NCHE's have no benefit, I think that you are still stuck with the small plan audit/bonding requirements.