Multiple Employer Plan & Audit

[Guest EricWings]

First I have zero experience in the Multiple Employer Plan area so if this is a dumb question sorry.

We took over a multiple employer plan in May 2008 and broke the plan up into 4 individual plans. At the beginning of the year they had over 120 participants, but broken up each plan has <120 participants. Do I need to audit all 4 plans seperately for 2008?

Thanks

[J Simmons]

Hip shooting here, but I think that the MEP would need an audit for the year until the spin offs occurred. The four post-spinoff plans should not need audits.

EDITED ADDITION: If the MEP is one of the 4 plans resulting after the spinoffs, the it would need to be audited for the entire 2008 plan year. As to the other 3, their plan years in 2008 began the day of the spinoff and end on 12/31/2008. Each of these other 3, new plans never had 100 or more employees at the beginning of the 2008 plan year.

The countervailing notion is that each of the 4 post-spinoff is merely an extension of the MEP that, at 1/1/2008, had 100+ employees. However, the Forms 5500 for the 3 new plans would have plan years of just the date of spin-off to 12/31/2008. The independent annual audit is a requirement incident to the annual report. So if the annual report is for a period that these 3 new plans did not have on day one 100 or more employees, it follows that those 5500s do not need the annual audit.