Counting participants when there's a prevailing wage contribution

[Flyboyjohn]

Plan has age 21, 1 YOS, dual entry eligibility requirements for all contributions except prevailing wage contributions which have to be made whenever an employee works on a prevailing wage job.

For purposes of counting participants on the first day of the year do we have to count all employees since they potentially could be assigned to a prevailing wage job or can we somehow split the baby and only count those employees who haven't met "regular" eligibility but who are in fact working on a PW job on the magic date?

[ETA Consulting LLC]

I think there is a difference between "employees who could" work a prevailing wage job and "employees who are working" a prevailing wage job.

Good Luck!

[Peter Gulia]

The Form 5500 Instructions describe as an “active” participant “any [natural person] who [is] earning or retaining credited service under the plan[.]”  This is ambiguous because the mention of service doesn’t say whether it refers to eligibility service, accrual service, vesting service, or participation service.

 

One might be tempted to resolve an ambiguity by referring to the concept of an entry date.  And one might invent an interpretation that is logically consistent with 29 C.F.R. § 2510.3-3(d)(1)(ii), a portion of the rule on which the Labor department grounded this bit of the Form 5500 Instructions.

 

Does the plan’s document specify an entry date for those who do not meet eligibility conditions for any accrual other than the prevailing-wage accrual?

 

If not (or if that provision is not what the plan’s sponsor desires), is it feasible to amend the plan to specify such an entry date?

 

Or does the plan’s text support a loyal, prudent, and impartial interpretation that an entry date for a prevailing-wage accrual is the first day on which the employee first performs or otherwise is credited with an hour of accrual service allocated to a prevailing-wage project?

 

Consider establishing each person’s entry date (for the first kind of accrual that makes her a participant), and then applying the participant-counting rules of the Form 5500 Instructions.

 

Consider too that a plan administrator’s decisions about who is or isn’t a participant matter for communications and other purposes beyond Form 5500 reporting.  A plan’s administrator might consider circumstances in which someone not counted as a participant for the Form 5500 report is a participant within the meaning of ERISA § 3(7).