requiring prior YOS in a startup plan - records sketchy

[AlbanyConsultant]

I suspect that I already know what the best advice is going to be, but I'm hoping that someone can point me to something otherwise...

A new plan is starting up 7/1, and all employees will be eligible only if they have met the plan's service requirement of 1 YOS.  This requires the plan sponsor to review their records and see who actually worked 1,000 hours or more in a year for all employees... back to each of their hire dates, right?  There's no "only go back seven years" kind of cut-off?  The response I got was that they switched payroll vendors several years ago and purged records after seven years.

I'd normally try to remove the YOS requirement, but it's needed here because they're large enough with a relatively sizable ~10-15 hour per week staff such that if they included them all, it would put them over the audit threshold (yes, there are ways around that like multiple plans).  It seems like the best they can do is to take the records that they have, make notes that these are representative for the ones that they are consistent for, make notes for why they are including anyone who they think would have made 1,000 hours in any year, and keep the notes in their files.