Audit Requirement and Otherwise Excludable Employees

[Guest kdddk14]

I have a 403(b) plan which will now be subject to audit under the new rules. The plan has over 100 participants but uses a very liberal entry schedule of 90 days.

Are you able to apply the otherwise excludable employee rules in determining the number of participants which could bring it under the 100 participant requirement?

[rcline46]

In a 403(b) plan the entry date for deferrals is immediate, you cannot have a 90 day entry unless you are speaking of employer contributions only. Therefore, the otherwise excludable does not work.

Hope you are not over 120 AND the DOL gives you the 80-120 rule.

[Guest kdddk14]

In a 403(b) plan the entry date for deferrals is immediate, you cannot have a 90 day entry unless you are speaking of employer contributions only. Therefore, the otherwise excludable does not work.

Hope you are not over 120 AND the DOL gives you the 80-120 rule.

Let's say it is a 401(k) plan with the same information, could you then exclude from the participant count for the audit?

[Kevin C]

No. Look at the Form 5500 instructions. Large or small plan status is determined by the line 6 participant count. The instructions for line 6 are pretty clear about who has to be counted.