Best payroll start date for contributions

[TPApril]

Plan doc terms: Eligible on 1st of month next following 1 year of service
Payroll periods:  Twice monthly, but paid 5 days after end of payroll, so 1/31 payroll is paid 2/5

Question: Employee is hired 1/15 and becomes eligible 2/1 of following year. Would participant begin participating on payroll paid out on 2/5, or 2/20? Justification for 2/5 is that it is paid after eligibility date. Justification for 2/20 is that 2/5 is based on pay earned prior to eligibility date.

[John Feldt ERPA CPC QPA]

February 5

[Mike Preston]

What John said.

[MoJo]

2/5.  Operate the plan on a cash basis.

[Bill Presson]

Agree 100% with the previous posts.