Short plan year entry

[Guest jefe96]

Client has startup plan effective 5/1. First plan year will be short year 5/1 -12/31. Thereafter it is a calendar year plan. Entry dates are plan year quarter. The plan year is defined as the 12 month period commencing on January 1 and ending on December 31. Eligibility reqt's are 3 month period of service and age 21. Question is, someone is hired in July and therefore would complete the 3 month period in October. When does this person enter? What are the entry dates for the first short year if they are quarterly? Are they 5/1, 8/1, and 11/1? Or are they 5/1, 7/1, and 10/1? If it is the latter then this person wouldn't enter until 1/1/05 and would not have to receive an allocation of the contribution for the first year, otherwise they would enter 11/1 and would have to benefit. Since the entry date is plan year quarter and the plan year is a calendar year except for the first year, shouldnt' the entry dates correspond also to the calendar year quarters?

[WDIK]

Some thoughts:

1) If your plan document specifically reads that an entry date is a "plan year quarter" and you were to take that literally, the short plan year quarters would begin on 5/1, 7,1, 9/1 and 11/1. (Quarters implies four and an eight month period would be divided into four two-month periods.)

2) If the document language is somewhat ambiguous regarding what quarterly entry date means, the plan administrator should make a reasonable interpretation.

3) In many cases, entry date language for short plan years will indicate whether or not the first dat of a short plan year is also considered an entry date for plan purposes.

In answer to your question, and based on most plan language I have seen, it is most likely that the document would be interpreted to provide entry dates as of 1/1, 4/1, 7/1 and 10/1 with a possible entry date on 5/1 for the short plan year.

CAUTION: I have not read the plan document, so my opinion is pure speculation.

[Guest jefe96]

It's a Corbel VS document and essentially has no language specific to the short plan year nor anything mentioned about the effective date being an entry date.