SCHEDULE T

[stevena]

Could someone help me out with the 3 year cycle for schedule T? I have been looking for rev. ruling 93-42 but cant find it. I usually file every year for small 401(k) plans that i administer. Just started with another firm and they file every 3 yrs.

All our plans are about 50-60 ees, with terms and hirings every year in most plans. I dont know what "relying on prior year testing" would mean?

I also searched the board, but only found one message on the topic, and it said filing every year was just "easier" than proving that a plan could file every 3 years. Is there some test that you have to pass to prove that you can file every 3?

Thanks much!

[stephen]

For 2005 plan years it seems this is changing. See the link below.

2005 5500 Schedule T Changes

[stevena]

HUH....Who would have thunk it. I am all for discontinuing schedule R, but the T???

Anyway, would love response for 2004 filings. I dont want to not file for all these cases if I should be filing!

Thanks for the info

[Tom Poje]

personally I would not use the three year method on small plans. it is to be used only on plan with 'insignificant changes'.

with a small population, changing the status of even 1 person from nhce to hce or vice versa could have a dramatic effect. why get lazy when your dealing with a limited number of people.

the changes to the 5500 does not eliminate the need for coverage testing. everything stays the same - you simply are no longer providing more detailed info to the govt. but you still have to perform the test, and have it in your records. just in case of audit. good grief. do you do the same with the ADP test? since you send nothing in, dont bother with it?

[stevena]

Nope, I am very dilligent with my plans. Obviously I wouldnt not run coverage if there wasnt a T...I was just suprised at the change.

I am working at a new firm that sort of seems to do things very differently...so I am struggling a bit. I worked somewhere that did everything by the book and to the letter for a long time. I just can't tell in the new firm I am at, what is ok to do and what isn't. It seems almost eveything is done so differently.

[JDuns]

As Tom referenced, the 3 year rule is based on the substantiation guidelines. If you can represent that there have been no material changes to the population or plan terms, you can test on a 3 year cycle.

In my opinion, if you intend to rely on the testing cycle, you should have something in your file indicating that there have been no such changes. However, if you are going to the trouble to review the data for changes, it is probably just as easy to run the tests.