boy count = eoy or boy?

[chuTzPA]

Form 5500 asks for participant counts as of the 'beginning of the plan year'.

I have seen two practices in how to report this as follows:

1. Bring forward end of year count from prior year 5500.

2. Actually calculate current participant count at the first day of the plan year, including new entries.

Which is really the more common practice?

[david rigby]

2

[ESOP Guy]

2 in particular if you are close to the audit/ no audit break point.

Method 2 is clearly the correct method if you read the instructions.

I worked for a place that had almost all large plans and for some we were a little lazy and just brought forward the prior year's numbers but it just didn't matter on the audit/no audit question.

[12AX7]

The IRS had already weighed in on this during an ASPPA Q & A. No. 2 is the way.

[GMK]

Consider, for example, a plan with one year of service for eligibility, but which has participation begin retroactively from the first of the year once the employee becomes eligible.

[My 2 cents]

Consider a plan with a single entry date equal to the first day of the plan year. All people who became eligible to enter this year are not in the end of the year count for last year, but they are in the beginning of this year count. Note that the count for PBGC premium purposes is to be established at the end of the prior year.

Suppose there were 300 people in the plan at the end of 2012 (calendar year plan), 30 entered on January 1, 2013, 15 people ceased to be participants during 2013, and 31 people became participants on January 1, 2014.

The 2012 5500 shows 300 participants at the end of 2012. The 2013 5500 shows 330 participants as of the beginning of 2013 and (330-15=315) as the number of participants at the end of 2013. The 2013 PBGC form bases the per-participant premium on the 12/31/12 count of 300. The 2014 PBGC form bases the per-participant premium on the 12/31/13 count of 315.

Note that some determinations must look at the number of people as of a given date and some are based on the highest count during a year. People count upon entry and only drop out of the count when entitled to no further benefits under the plan.

[BG5150]

Consider, for example, a plan with one year of service for eligibility, but which has participation begin retroactively from the first of the year once the employee becomes eligible.

Even semi-annual entry date.

Say you had 110 participants at the end of 2013. But in September & October you hired 15 new people full time. Assuming they are all still with the company, you'd now have 125 at the beginning of 2014.