One man plan

[Julie]

Just took over a hard frozen one man plan, defined benefit plan, who received the 204(h) and amendment.  Does the plan automatically pass minimum coverage?? There will not be any new employees ever entering.

[shERPA]

It might pass coverage (410(b)), but it won't pass 401(a)(26) if there is just the one participant (assumed to be an owner/HCE?) and there are other employees who will otherwise meet statutory eligibility requirements.

[Mike Preston]

Not  necessarily true. ATD? 

[shERPA]

"ATD"?

[Mike Preston]

Measure the 0.5 requirement using accrued to date. 

[shERPA]

But other ees who never benefit at all?

[Mike Preston]

1 hour ago, shERPA said:

But other ees who never benefit at all?

Missed that on your original post. Did you edit and add it? ?

[shERPA]

22 minutes ago, Mike Preston said:

Missed that on your original post. Did you edit and add it? ?

Nope, no editing, that wouldn’t be fair!

[Julie]

The Employee is the owner. Does that make a difference ??? Must we still compute .5 requirement??

[shERPA]

As Mike points out, based on  the accrued-to-date method the 0.5% requirement is not likely to be a problem.   If there are other employees in the company who would otherwise meet eligibility except for the plan being frozen, that's a problem.  None of them meet the 0.5% requirement.