Plan termination - plan had been a large plan

[Pammie57]

We had a client whose plan had been a large plan for several years, and filed the 5500 and an audit report.  They terminated their plan mid 2021 and rolled all balances into the plan of the company who acquired the former plan sponsor.  Their TPA is telling me that they are not required to file the 5500 for 2021, but can file the 5500-Sf.  I though it was based on participant count at the beginning of the plan year.  Obviously, they had zero at plan year end.  Thanks for any insights.  

[david rigby]

4 hours ago, Pammie57 said:

They terminated their plan mid 2021 and rolled all balances into the plan of the company who acquired the former plan sponsor. 

Rather than worry about the participant count, someone should first determine whether this was a plan termination, or a plan merger.  It cannot be both.

[BG5150]

Either way, i think an audit needs to be done, no?

[Luke Bailey]

Whether plan has to file as large or small is based on # of participants at beginning of year. See 5500 instructions page 8 and 29 CFR 2520.104-41(b). So if I'm understanding your description of the facts correctly, the plan would still need an audit. However, if it was a merger, depending on the timing of the merger during the nonsurviving plan's plan year, you may be able to defer the audit and combine it with the audit of the merged plan. See 29 CFR 2520-50.