Plan sponsor left PT employees off census request...

[kwalified]

a small PS plan with age 20.5/6 months of service have left off Part Time employees(no more than 49 of them) off their census request for AT LEAST one plan year. Problem is their plan doc does not exclude PT employees from the definition of eligible employees. Only leased, union and alien are excluded, therefore if they work 6 continuous months and are age 20.5 they enter the next plan year. Worst case scenario????

[Tom Poje]

you are correct

worst case: plan is top heavy so they are due top heavy minimums.

testing: most likely no problem since you could test otherwise excludables separately, and since it's unlikely there is an HCE in the group its not an issue.

even worst case: if the plan has 70 people in it an additional 49 (assuming all still active) would bring the count to 119, which is getting near the form 5500 audit level (assuming of course the count has never been over 100 in the first place.)

[kwalified]

Tom

39 participants IN the plan 49 excluded by sponsor for being "PT". No key employees, so TH is not an issue. Oh and the plan just got picked for a random audit