Entry Dte

[DTH]

Must an on-going plan always have one of its entry dates as the first day of the plan year?

Thanks.

[R. Butler]

What are the eligibility requirements?

[Tom Poje]

I work on one plan where eligibility is 6 months and you enter on 12/31 following, so I guess it is possible, though conceivable it could present problems.

An ee hired 7/1 could be treated as completing the eligibility as of 1/1, in which case the ee should come in since the regs require one to enter first day of plan year after meeting eligibility.

The problem is not solved by using inclusive logic and saying ee satisfies requirements at 12/31, because then the ee hired 7/2 would satisfy requirements at 1/1. But that is about as goofy a plan as I have ever seen. and after they amended the plan to include deferrals, I made them switch to 1/1 and 7/1 entry dates.

[DTH]

Eligibility requirements are age 21 with 1 year of service. The regs. state "no later than" the earlier of (1) 1st day of the PY after meeting eligibility requirements or (2) the date 6 months after the date the employee met the eligibility requirements.

I assume that the date can be a different date than the first day of the plan year since the regs. say "no later than".

Just wanted to know if anyone has had a client ask for an entry date(s) that does not include the first day of the plan year (e.g., 1/1 plan year with a 12/31 entry date).

Thanks!

[R. Butler]

Eligibility requirements are age 21 with 1 year of service. The regs. state "no later than" the earlier of (1) 1st day of the PY after meeting eligibility requirements or (2) the date 6 months after the date the employee met the eligibility requirements.

I assume that the date can be a different date than the first day of the plan year since the regs. say "no later than".

Thanks!

As Tom Poje states hypothetically its possible; although you do have a problem if it is possible that someone won't enter within the at the earlier of....

I assume this a 401(k) plan since your in the 401(k) forum. Do you have at least 2 entry dates? It seems to me that at least 1 of the entry dates would have to be the last day of the plan year or you would always have a potential issue.

[DTH]

Yes this is a 401(k) plan. The client has bi-yearly entry, but asked a "theoretical" question. Assume they want to come up with an entry date that will keep employees out of the plan as long as the regs. will let them.

Thanks!

[R. Butler]

Yes this is a 401(k) plan. The client has bi-yearly entry, but asked a "theoretical" question. Assume they want to come up with an entry date that will keep employees out of the plan as long as the regs. will let them.

Thanks!

I don't see how not having an entry date at the first day of the plan year accomplishes that purpose.

[Tom Poje]

so you want the plan to have entry dates of

1. the first day of the plan year or

2. 6 months after satisfying the 1 year wait.

thats 182 or 183 entry dates.

I think that is possible in an individually de$igned plan, so added cost there.

the poor administrator who has to handle the case.

the poor payroll processer who has to make sure people are given a chance to defer on one of those magic dates for new entrants.

good grief its hard enough to process a plan without all that!

[rcline46]

Now I did not go back to the regs, but we did a calendar year plan with entry dates on 4/1 and 10/1. When researching this we discovered the EFFECTIVE date of the plan must be an entry date, but first day of plan year was not so required.