Schedule H in 2008, what is required in 2009

[cpc0506]

Plan has been a large plan for the past few years. This year the participant count at 1/1/2009 fell to 111. I would like to file a Form 5500 SF. Is the plan still a large plan for 2009 or can I use the 80-120 participant rule and file a Form 5500-SF?

This is the languag from the Form 5500 Instruction Booklet:

Exceptions:

(1) 80-120 Participant Rule: If the number of participants reported on line 5 is between 80 and 120, and a Form 5500 annual return/report was filed for the prior plan year, you may elect to complete the return/report in the same category(‘‘large plan’’ or ‘‘small plan’’) as was filed for the prior return/report.

Thus, if a Form 5500 annual return/report was filed for the 2008 plan year as a small plan, including the Schedule I if applicable,

and the number entered on line 5 of the 2009 Form 5500 is 120 or less,you may elect to complete the 2009 Form 5500 and in accordance with the instructions for a small plan, including for eligible filers, filing the Form 5500-SF instead of the Form 5500.

I have bold and italicized the words that I am relying on to be able to complete a 500-SF. If you can elect to complete in the same category and then can elect to complete in the other category....

Any thoughts....

Thanks.

[chc93]

My recollection from a few years ago...

1. small plan filing Form 5500 w/Sch I. can continue as small plan filing as long as participant count doesn't exceed 120.

2. large plan filing Form 5500 w/Sch H. must continue filing as large plan as long as participant count exceeds 100, and can continue filing as large plan as long as participant count remains larger than 80. (We've actually heard of a plan that dropped below 100 but wanted to file as a large plan so they could continue to require the independent plan audit -- don't know any other details.)

So, if you were over 120 in the past and filed as a large plan, you can't change to a small plan filing until the count drops below 100, not 120. We haven't encountered this situation, but recall some discussion we had back then.

[My 2 cents]

Our understanding is that a plan with 100 or more participants files as a large plan and a plan with under 100 participants files as a small plan. A plan between 80 and 120 participants may elect to remain in the same format as the year before.

A plan that filed as a large plan last year that has between 100 and 120 participants now files as a large plan. A plan that filed as a large plan last year that has between 80 and 99 participants may either file as a small plan now (based on this year's count) or elect to continue to file as a large plan.

A plan that filed as a small plan last year that has between 80 and 99 participants now files as a small plan. A plan that filed as a small plan last year that has between 100 and 120 participants may either file as a large plan now (based on this year's count) or elect to continue to file as a small plan.

A plan that had 130 participants last year and 111 participants now has no option - they must file as a large plan.

[Belgarath]

I don't interpret the instructions to allow an SF. See excerpt from SF instructions below. Since you were not eligible to file as a small plan for 2008, you fail the first test in (b), and since you have more than 100 participants for 2009 you fail the test for (a), so no SF. That's my take on all this.

1. The plan (a) covered fewer than 100 participants at the beginning of the plan year 2009, or (b) under 29 CFR

2520.103-1(d) was eligible to and filed as a small plan for plan year 2008 and did not cover more than 120 participants

at the beginning of plan year 2009 (see instructions for line 5 on counting the number of participants);

[Kevin C]

The Form 5500 instructions are pretty clear. Fewer than 100 participants at the beginning of the year is a small plan. 100 or more at the beginning of the year is a large plan. If you are 80-120, you may elect to file the same category (small or large) as you filed last year. You are at 111 participants and filed as a large plan last year. Any way you look at it, you are a large plan filer this year, too.

[cpc0506]

Thanks for all of your responses. This is how the majority of us in the office read this as well.