Form 5500 Requirement

[Guest MbCarey]

Can someone tell me if I am correct. We just took on a new plan in 2009. In 2008, they had 135 participants at the beginning of the year and 123 at the end of the year. They filed a 5500 with an audit for 2008.

In 2009, the beginning of the year participant count is 118 and the end of year participant count is 87. They are still required to have an audit for 2009?

This plan is being merged in with another plan in 2010 so we will do a final 5500 in 2010 with a beginning of the year participant count of 87. The audit is still required if they did not file a Form 5500SF in 2009 even though they do not have over 100 participants.

[Tom Poje]

if at the beginning of the year you have less than 100 participants you can file the short form.

I am a bit confused as to how, on 12/31/2008 you could have 123 participants and on 1/1/2009 you have 118.

It doesn't effect anything as far as being required to file the long form, but how did the count drop? I can understand it going up due to people entering on 1/1, but I can't imagine how it could drop unless somehow how 6 people merged into 1 person or something similar to that.

[Guest MbCarey]

Tom,

You are correct. I will look at the information from the prior recordkeeper. I was taking the beginning of the year participants from a Principal Financial Count and it could not have included participants eligible but not contributing. Kind of piecing together information from various sources.

For some reason, I thought that one of the requirements to file a 5500 SF and not be required to have an audit was that your had to have filed as a small plan the prior year and since they filed as a large plan in 2008 wouldn't that make them not meet the requirements to file as a small plan.

Sorry if I am confusing you. Thanks for bearing with me.

[Tom Poje]

you are thinking of the rule that if you are below 120 participants and file a short form the year before you can file the short form again.

but once you drop below 100 its joyful day.

I have actually heard of cases of a company having 2 plans just to keep the count under 100 in each one and avoid the audit requirement.

[MBCarey]

Thanks Tom. The company will be glad to hear that. I was thinking of the 120 rule. I just didn't realize that once you drop below 100 then you don't have to do a full blow 5500.

Prime example of "Never too old to learn". especially in Pension Land..