Should I file a Sched H or 5500-SF? - Count of BOY participants

[Bruddah Kimo]

I have a calendar year 401k plan that filed Sched H in 2014 with 98 participants at EOY. On January 1, 2015 five more employees became eligible to participate. Do I need to file a Sched H for 2015 since my BOY participants is now 103, or are my BOY participants considered to be 98 allowing me to file as a Small Plan for 2015? I've researched but haven't been able to find a definitive answer on my BOY participant count. Thank you!

[My 2 cents]

While I do not work on 401(k) plans, wouldn't they fall under the rule that permits continued use of the SF when the count bumps over 100 (but not 120)?

[GMK]

^agreed. Your BOY total is your total on January 1. It is 103, not 98, but you can continue to file the same as you did in the previous year, because you're not at 121 yet. You also have the option to file as a large plan if you really, really want to.

[Bruddah Kimo]

The plan did not file as a small plan in 2014, but filed a Sched H as a large plan. So it sounds like I must file as a large plan in 2015 as well - not good. This is a plan I inherited from someone who told the sponsor they would not require an audit for 2015.

[GMK]

^agreed

[My 2 cents]

The plan did not file as a small plan in 2014, but filed a Sched H as a large plan. So it sounds like I must file as a large plan in 2015 as well - not good. This is a plan I inherited from someone who told the sponsor they would not require an audit for 2015.

Did not pick up from the original post that they filed as a large plan last year. I understand the instructions to key off of the number of participants as of the beginning of the plan year. They filed a full 5500 last year (presumably with an auditor's report) for 2014. Is it safe to assume that, notwithstanding the fact that they had only 98 participants at the end of 2014, they had over 100 at the beginning?

As for inheriting the plan from someone who told the sponsor they would not need an audit for 2015, I am reminded of a presumably apocryphal story from the old Soviet Union: When Krushchev became premier after the death of Stalin, an official gave him two sealed letters from Stalin with the instruction that when the first crisis occurred, he was to open the first letter, and upon the second crisis, he was to open the second letter.

After a period of time, a crisis occurred, and he opened the first letter from Stalin. It said only "Blame me". So he blamed Stalin and the crisis passed. Later, when the second crisis occurred, he opened the second letter, which said, in full, "Write two letters."

[Belgarath]

This may sound ridiculous, and I've done no research on this, so it is just floating a thought - can you file an amended form for the 2014 plan year as a small plan, and therefore continue to file as a small plan in future years until the magic 121?

[My 2 cents]

This may sound ridiculous, and I've done no research on this, so it is just floating a thought - can you file an amended form for the 2014 plan year as a small plan, and therefore continue to file as a small plan in future years until the magic 121?

Has the number of participants as of the start of a plan year ever been below 100? There may be a good reason why they filed a Schedule H in 2014. Maybe they have never qualified for a small plan filing. The 80-120 rule allows you to continue filing the same form as last year, not to change to small plan if between 100 and 120.

I don't know if it would be acceptable to refile last year as a small plan if they qualified last year as a small plan, but it certainly would not be if they did not.