New Employer Short Plan Year

[Hoard1]

May an Employer that started business 8/1/99 make the effective date of a Plan 1/1/99?

[Guest JMLSON]

Normally, the effective date of a plan would not precede the company's existence unless there is a predecessor employer that would be treated as the same employer. This would demand that certain limitations be prorated for the short plan year. The IRS has not formally addressed this issue. If they decide to predate the effective date, it should be noted in the determination letter application for approval by the IRS. Hope this helps.

[Scuba 401]

What would be the first day of the plan year for a plan that has been spunoff from an existing plan? The document actually specifies the spinoff date as a valuation date.