Participant Count - Plan Spin-Off

[KateSmithPA]

We have a plan that had spin-off in 2012. The effective date of the spin-off plan is 01/01/2012. The assets were all transferred in January, 2012. We are not involved with the now spinned off plan.

For our plan purposes, does our beginning of year participant count include the eligible employees of the plan that left? They were included in our end of year count for 2011, but as of 0101/2012, they were not eligible to participate in our plan.

Is it okay to have a beginning of year count that is less than last year's end of year?

Thank you.

[ESOP Guy]

We have a plan that had spin-off in 2012. The effective date of the spin-off plan is 01/01/2012. The assets were all transferred in January, 2012. We are not involved with the now spinned off plan.

For our plan purposes, does our beginning of year participant count include the eligible employees of the plan that left? They were included in our end of year count for 2011, but as of 0101/2012, they were not eligible to participate in our plan.

Is it okay to have a beginning of year count that is less than last year's end of year?

Thank you.

My guess is they are still participants becasue they still had a balance on 1/1/2012 since the transfer didn't happen until after 1/1/2012. On that day they still had all the legal rights of a participant. Can I point to a rule saying that? No but to me that is how I would do it.