Puerto Rico Participants

[Randy Watson]

Based on Rev. Rul. 2008-40 and 2011-1, you can avoid income tax on transfers from a U.S. qualified plan to a Puerto Rico qualified plan as long as that transfer takes place by the end of 2011. The articles I've seen on this issue dealing with these Rev. Rulings also indicate that you can avoid qualification issues if you make a transfer within this window. My question is whether there are any qualification issues if you simply continue to cover a Puerto Rico employee under the U.S. plan without making such a transfer.