Jan 1 and Entry Dates

[Guest Pippy]

We work with a plan that uses a prototype document, has Jan 1 anniversary, and semi-annual entry dates. Does 1/1 have to be one of the semi-annual dates? The base plan document seems to be silent on the issue.

[Tom Poje]

I think someone thought about that, and actually put it on paper just recently and the time-space continuum was disrupted accompanied with the collapse of the Vortex and a lot of other things (e.g. the current weather we are having)

......one of the requirement for entry dates is

410(a)(4) is first day of the plan year after the employee has satisfied the eligibility requirements, or

6 months after the date the requirements were satisfied.

so unless one of your entry dates is the last day of the plan year you would probably run afoul of the Code requiring entry on the first day of the plan year

[ETA Consulting LLC]

Notice, that the 410(a)(4) has a reference to 410(a)(1). So, the semi-annual entry would apply when you have 21 years and one year of service as eligibility conditions. You could, conceivably, have a single entry date if you were to have less restrictive eligibility conditions (i.e. immediate eligibility). Even then, you'd have to ensure that anyone who is age 21 and works 1 year of service enters the plan by the 1st day of the plan year OR 6 months from meeting 21 & 1.

To be safe, semi-annual with 1st day of year and 1st day of 7th month of year will give you a catch-all.

Good Luck!