Plan Start Date

[Jilliandiz]

New Business is established 10/1/07, however it is not operating with employees until 10/15/07, can I still make the effective date of the plan 10/1/07?

Thanks!

[JanetM]

You would have the owner/plan sponsor on 10/01/07. I don't see why you couldn't use 10/01.

[austin3515]

I think there is some precedent for making the plan effective 1/1/07! The advantage of this is not to have to prorate the 225K comp limit nor the 415 limit.

According to the ERISA Outline Book, at the 1997 ASPPA Annual Conference this questions was posed to the IRS and the response was that effective date could predate the existence of the company. The EOB does recommend that if you do this, this should be specifically noted in the request for a determination letter.