New plan beginning participant counts for 5500

[Purplemandinga]

Lets say a plan has 10 employees, and all employees have enough service to basically enter a plan on day one if a plan were to begin. If an elective deferral only plan was established effective 1/1/2018 but elective deferrals were not effective until 10/1/2018 would my beginning participant count for 5500 purposes include 10 employees or 0 employees since elective deferrals weren't effective till 10/1?

[RatherBeGolfing]

You are focusing too much on the deferral effective date even though it is only one of several plan features.  If the plan effective date is retroactive to 1/1/18 and the employees are eligible and enter 1/1/18 your count is 10. 

[Bird]

Is this an entry for the "dullest career" competition?

I agree with RBG - they are participants as of 1/1, but the deferral feature simply isn't open yet.  BOY count = 10.

[Purplemandinga]

Thanks guys.

 

I only know how to ask dull questions. I think that should be my personal quote on this site!

[Purplemandinga]

Do your answers change if the plan's eligibility conditions are source specific? For example the plan's eligibility conditions are set at each source but elective deferrals are the only allowed source. So an employee is eligible for the plan and elective deferrals after 1 year of service elapsed time and enters the plan immediately. 

[RatherBeGolfing]

I'm not sure you can do it that way.  The underlying plan is still a profit sharing plan even if you don't "allow" profit sharing contributions.  You cant have a 401(k) feature without an underlying plan.  They would still meet eligibility for the PSP as of 1/1/18.

If we take your approach and say that since PS contributions are not "allowed" there is no source to enter for as of 1/1/18, then we couldn't have a retroactive effective date of 1/1/18.  You would need an effective date of 10/1/18 with a short first plan year, and you would still have 10 as a BOY participant count.

 

[Below Ground]

If a person qualifies under ANY source of the Plan on 1/1/2018 then that person is a participant.  Participation is by virtue of age/service/Entry Date Timing.  Everything else is ancillary and irrelevant for the Form count.