5500sf - do you count 0% vested?

[jmartin]

A 401k plan has 15 active partcipants (8 have a balance) and 10 terminated with a balance. Of those 10 term, four are 0% vested. So for lines 5b and 5c, do I count the terms who have a balance but are 0% vested?

Would line 5b be 25 (15 + 10)  or 21 (15 + 6)? Would line 5c be  18 (8 + 10) or 14 (8 + 6)?

Any official link, code, or publication I can reference?

[Madison71]

I’m certain there are a varying opinions on count, but our plan document treated terminated participants that are 0% vested as deemed distributed and would not have to wait for 5year BIS before forfeiting.  Therefore, in our plans I would not count on 5b or c.   I don’t have a cite 

[John Feldt ERPA CPC QPA]

That’s correct. The answer will be found in your plan document to see if they are treated as having received a “deemed distribution”. That will be your official cite. 

[Eve Sav]

But unless they have actually been cashed out (by forfeiting their balance) they still have an account balance at the end of the Plan Year. Are you saying you don't count them, even if their non-vested amount has not yet been forfeited as of the end of the Plan Year? 

[BG5150]

FWIW, I don't think the Relius 5500 count report treats them as a participant at EOY if they are termed and fully zero percent vested.

(I could be wrong, it's been a long time since I've really checked that by hand.)

[ESOP Guy]

The instructions to the 5500 has this under the Active count:

Active participants also include any nonvested individuals who are earning or retaining credited service under the plan. This does not include (a) nonvested

former employees who have incurred the break in service

period specified in the plan or (b) former employees who have

received a “cash-out” distribution or deemed distribution of

their entire nonforfeitable accrued benefit.

 

Are these non-vested but not deemed dist people caught in the part I made bold?  I have met people who count here terms who are 0% vested but don't forfeit until 5 BIS.  They would argue since it says deemed dist don't count and this plan doesn't deem dist they must count. 

Fortunately, most of my plans have a deemed dist provision and/or are so far above the 100/120 threshold I haven't had to think about it hard for many years.  

 

[BG5150]

Unless those people will push you over the audit threshold, do you this an Agent would be savvy enough to look at the plan to see if the doc called for 0% vested terms to be either deemed distributed right away or wait 5 years?