Do receivables count as compensation?

[Guest Phil L]

A dentist is winding down his business. He sold all of the assets of the business and all the employees ceased working for this dentist. They now work for the company that bought the assets.

The dentist is sole remaining employee of his dental practice. He will fully vest all employees due to a partial plan termination. He will continue to collect receivables well into the year 2000. He will have no other compensation from his dental practice.

Can he count the collection of receivables as income for retirement plan purposes? Some might argue that he has no hours of service in the year 2000 that relates to the "compensation" although he will obviously spend some time doing the accounting and actually collecting the receivables. Would this be an agressive move to treat the receivables as compensation for purposes of the retirement plan?

------------------