Terminated Plan and audit requirement

[cpc0506]

Hello.

I have a 401(k) plan that was established in 2011. Salary deferral Only. There is a 2 month wait to enter plan.

Plan terminated 4/15/2012 as there was a merger of corporate assets and the company no longer exists.

Problem: Plan was not subject to audit in 2011. But 1/1/2012, due to the relaxed eligibility requirements, there were more than 120 active participants at the beginning of the plan year. Is the plan subject to audit? Is there any regulation that exempt the plan from audit?

[david rigby]

See page 7 of the 2011 Instructions for the 5500 for a description of the 80-120 rule.

http://www.dol.gov/ebsa/5500main.html