Last Day of Plan Year 12/30?

[MarZDoates]

Participant's last day of employment was 12/30/05. Since 12/31 fell on a non-business day, does that mean 12/30 was the last day of the plan year? Participant must be employed on last day of plan year to receive an allocation of profit sharing contribution. (Calendar year plan.) Thanks.

[Guest shelka]

According to McKay Hochman website:

If the last day of a plan year falls on a Saturday or Sunday & the employee has the status of an employee on the last business day of the plan year, then the employee is considered employed on the last day of the plan year. i.e. 12/31/05 is a Saturday. Plan requires a participant to be employed on the last day to receive an allocation. If the company's usual business operations period is from Mon - Fri only & the employee's last day of work in 2005 was Fri,12/30,the employee is deemed to have satisfied the requirement of employment on the last day of the plan year. However, if someone were actually terminated from employment on 12/30, the employment relationship had ceased before the last day of the year & there would be no entitlement to an allocation. Rule also applies to off-calendar year plans.

[MarZDoates]

Sweet! I knew I saw something somewhere.

Thank you SOOOOO much!

[Guest Harry O]

Is there a citation for the McKay Hochman statement?

[Guest shelka]

They don't reference a citation -- issue was addressed at a recent ASPPA National Conference.

[Tom Poje]

question 32 at the 2005 ASPPA fall conference

[Guest Harry O]

This is obviously a facts and circumstances determination but I don't think this is necessarily correct. If I quit on December 30th and am only entitled to pay through December 30th (e.g., no accrued vacation, etc.) and am not treated as employed by the employer for any other reason on December 31, I would think I'm not employed on December 31 regardless of whether it falls on a weekend.