Participant count - end of last year, begin of this year

[chc93]

Has there been any recent discussions on the participant counts at the end of one year and the participant counts at the beginning of the next year for the Form 5500.

For example, calendar year, 12/31/2014 participant count of 10. 2014 Form 5500 shows 10 for participants on last day of plan year. Two new participants with entry dates of 01/01/2015. On the 2015 Form 5500, how many participants at the beginning of the plan year... 10 or 12. Way back, I recall using 10 so that the end of one year equals the beginning of the next. Our 5500 software does this. But I'm inclined to use 12.

Will using 12 instead of 10 for the 2015 Form 5500 cause any problems? Any recent experience?

Same issue for active participant counts.

Also, will impact plans that may go over 120 (assuming filing 5500-SF in prior year).

Thanks...

[Lou S.]

The correct answer is 12 in your example. Yes it can push folks over the audit limit with new participants.

[david rigby]

Line 6a of the 5500 was modified for 2014. It's also mentioned on page 1 of the 2014 instructions.

https://www.dol.gov/ebsa/5500main.html

[GMK]

an earlier discussion:

http://benefitslink.com/boards/index.php/topic/55729-boy-count-eoy-or-boy

[chc93]

Thank you very much for the quick responses. In the "earlier discussion", looks like the IRS has opined in ASPPA Q&A... that 12 in my example is the correct response.

[BG5150]

Does your 5500 program actively calculate the participant count each year? Or, when the data carries over, does it just pre-fill last year's close?

[My 2 cents]

Does your 5500 program actively calculate the participant count each year? Or, when the data carries over, does it just pre-fill last year's close?

There is no reason, since all non-frozen plans perforce allow new participants in on the first day of the plan year, for 5500 software to just assume that the end of last year count is correct for the start of this year. If the 5500 software prepopulates this year's starting counting with last year's ending count, give serious thought to finding a new 5500 software provider.

[BG5150]

Does your 5500 program actively calculate the participant count each year? Or, when the data carries over, does it just pre-fill last year's close?

There is no reason, since all non-frozen plans perforce allow new participants in on the first day of the plan year, for 5500 software to just assume that the end of last year count is correct for the start of this year. If the 5500 software prepopulates this year's starting counting with last year's ending count, give serious thought to finding a new 5500 software provider.

I know. That kinda was my point. If the software is merely carrying forward last years data, then's its wrong. But if it is known that it is just a carry-over, then we can safely ignore it for all plans. However, if the program is calculating these numbers, or flat-out reporting the BOY should equal EOY, than the program has egregious flaws and should definitely be replaced.

[Tom Poje]

you guys are so lucky to have great clients.

sometimes I have participants who show up with 0 comp the following year and the comment "Oh yeah, they quit last year" so there has been one or two times the count at the beginning of the year is actually less than the prior year.

why am I the only one who gets these clients?

[My 2 cents]

you guys are so lucky to have great clients.

sometimes I have participants who show up with 0 comp the following year and the comment "Oh yeah, they quit last year" so there has been one or two times the count at the beginning of the year is actually less than the prior year.

why am I the only one who gets these clients?

Sure, the rest of us have never encountered that!

You could always amend last year's filing!

[chc93]

Does your 5500 program actively calculate the participant count each year? Or, when the data carries over, does it just pre-fill last year's close?

There is no reason, since all non-frozen plans perforce allow new participants in on the first day of the plan year, for 5500 software to just assume that the end of last year count is correct for the start of this year. If the 5500 software prepopulates this year's starting counting with last year's ending count, give serious thought to finding a new 5500 software provider.

I know. That kinda was my point. If the software is merely carrying forward last years data, then's its wrong. But if it is known that it is just a carry-over, then we can safely ignore it for all plans. However, if the program is calculating these numbers, or flat-out reporting the BOY should equal EOY, than the program has egregious flaws and should definitely be replaced.

Thanks for the comments. Our 5500 software carries over the EOY from prior year to BOY to current year. But also our 5500 software is not tied in to our valuation software, so there is no way that the 5500 software can calculate the correct BOY counts. As you say, as long as we know this, we can make appropriate changes.

My main concern was with electronic filing, and if the EOY from prior year not equal to BOY of current year would cause any problems. Our software vendor says "no problems". So all is good.

Thanks again...