Plan Entry Date is Last Day of Plan Year

[Guest]

I am currently reviewing a calendar year plan that states the following under Eligibility: each employee becomes a participant in the plan on the plan entry date immediately following the later of the completion of one year of service or the date he attains age 21, "plan entry date" means every June 30 and December 31.

My questions are these: does this plan satisfy the requirements of 1.410(a)-4(B)(1), that an employee must commence participation no later than the earlier of (1) the first day of the plan year beginning after the date the employee met the eligibility requirements, or (2) the date six months after these requirements are met? Is the plan document required to have a "first day of the plan year" entry date? When would a full-time employee, age 21 or older, hired on January 1 enter the plan?

[Guest RJM]

When would a full-time employee, age 21 or older, hired on January 1, 1998 enter the plan? Depends on Plan language. If PED is the 6/30 or 12/31 "immediately following completion of Elig. Req." (PPD prototype), PED is 6/30/99. If PED is 6/30 or 12/31 "coinciding with or immediately following completion of Elig. Req." (McKay prototype), PED is 12/31/98.

[Guest]

That's the key question. If the plan does not have a "first day of the plan year" entry date and the entry requirement is immediately following completion of the eligibility requirements, must the employee enter on the first day of the plan year, 1/1/99 (completed eligibility requirements on 12/31/98) instead of 6/30/99, to satisfy the regs. under 1.410(a)?