5500 EE Count - Rehires

[Guest sao0308]

If a participant terminates at the end of the prior plan year and is not included in the 5500 Count and is rehired in the next plan year, is that participant included in the count at the beginning of the plan year for 2005, even though he was hired in May, 2005? Thanks.

[Guest SHaddon]

Was he a participant at the beginning of the plan year? If yours is a calendar year plan, was he a participant on January 1. If not, you do not include him.

[Guest sao0308]

No, he was not a participant on 1/1/2005 because he wasn't rehired until May of 2005. Our software is including him as a participant at the beginning of the year even though he wasn't physically working for the company on that date. He was eligible prior to termination in late 2004, but would not be eligible to defer to the plan until his rehire date in May, 2005. I am overriding the system's count because I don't feel he should be included in the Beg of Year count. Thanks for responding.

[JanetM]

Did this person have an accrued benefit when they termed in 2004? If they had a benefit due to them they must be counted on line 7b as inactive.

If they had no vested benefit they are not included.

[Guest sao0308]

no accrued benefit at the end of 2004 - if he did, I would include him, but he left without a balance or benefit due, so I'm not including him in the count. Thanks for the info.