New Comp Plans, ABPT, and Plan Year Change

[buckaroo]

I have a client that has a new comparability plan. The plan year previously ran from 7/1 -- 6/30. They changed the plan year in 2009 so that they had the following two plan years: 7/1/2008 -- 6/30/2009 & 7/1/2009 -- 12/31/2009.

When I run the testing for the 12/31/2009 PYE, my understanding is that I will need to include the informaiton (EBARS) for both plan years when calculating the ABPT. This is due to the fact that all plan years ending in the same calendar year must be included for the ABPT. Please confirm.

Any comments are greatly appreciated

[Mike Preston]

I'm not so sure. While what you have stated is correct in the abstract, I think it is intended to address circumstances where there are multiple plans, one or more of which have differing plan years. I don't think it is intended to deal specifically with a short plan year. I don't have time to look through the regs to see if there are specific provisions addressing short plan years the way you have defined them.

By the way, I presume you have a typo in your description and the two plan years are actually 1/1 through 6/30 and the 7/1 through the next 6/30.

Are you saying you really have two short plan years in a row? And that the next plan year after the short plan years is again a 12 month year ending on 12/31? I don't think the IRS would even allow that.