JKW Posted February 7, 2012 Posted February 7, 2012 Hello. I have a plan the has always had an audit done b/c they had over 100 participants. For the 2011 plan year their headcount for the beginning of the year has dipped below 100. So they would not need an audit for 2011 correct? We can file as 5500-sf? Also, does this mean that they have to go over 120 again in future years to require an audit be performed again? Based on anything I read this seems correct, just want to be sure I am not missing something. Thanks.
Andy the Actuary Posted February 7, 2012 Posted February 7, 2012 Hello. I have a plan the has always had an audit done b/c they had over 100 participants. For the 2011 plan year their headcount for the beginning of the year has dipped below 100. So they would not need an audit for 2011 correct? We can file as 5500-sf? Also, does this mean that they have to go over 120 again in future years to require an audit be performed again? Based on anything I read this seems correct, just want to be sure I am not missing something. Thanks. There are 5500-SF conditions that are not participant-count related and you should assure yourself that these are satisfied. I also believe the 120 threshold is one-time shot. E.g., 99 participants in 2011, 115 participants in 2012, and 117 participants in 2013. Then, SF for 2012 but full 5500 for 2013. Thanks Kevin C for the correction. Mea culpa. The material provided and the opinions expressed in this post are for general informational purposes only and should not be used or relied upon as the basis for any action or inaction. You should obtain appropriate tax, legal, or other professional advice.
Kevin C Posted February 7, 2012 Posted February 7, 2012 The 80-120 participant rule can be used for any year that the beginning of year participant count is 80-120. It's not a one time thing. 2520.103-1(d)Special rule.—If a plan has between 80 and 120 participants (inclusive) as of the beginning of the plan year, the plan administrator may elect to file the same category of annual report (i.e., the annual report for plans with 100 or more participants under paragraph (b) of this section or the annual report for plans with fewer than 100 participants under paragraph © of this section) that was filed for the previous plan year. [Added on July 29, 1980 by 45 FR 51446; amended on March 1, 1989 by 54 FR 8624; amended April 19, 2000 by FR 65 21080.]
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