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5500-SF or Long Form


Catch22PGM

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We (TPA) created a new calendar year-end plan with a 9/1/2022 effective date so there is a short initial plan year.  There was no predecessor plan because it is a new company formed in early 2022 and we were using the dates requested by the plan sponsor.  Upon receipt of the year-end census data we found that nobody was eligible until 11/1/2022 due to the service requirement in the plan, and that there are approximately 350 eligible participants on 11/1/2022.  The plan sponsor operated the plan properly and those employees were enrolled on 11/1/2022.

I know an audit is not required due to the plan year being less than 7 months, but I am also considering whether we should file a Form 5500-SF since there were technically 0 participants on the first day of the plan year, or if a long Form 5500 should be filed.  It feels "off" to file a 5500-SF simply because the plan sponsor asked for a plan effective date that was earlier than anyone would be eligible for the plan, but I've never had this happen before so I'm hoping someone may have an opinion and would be willing to weigh-in. 

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Thank you Dare but that isn't really the issue.  If I stick with the premise that there were 0 participants on the first day of the plan year, the audit isn't being deferred - it isn't required.  A long Form 5500 wouldn't be needed because there weren't 100 (or 120) participants on the 1st day of the plan year.

My conundrum - is it proper to have a 0 participant count on the first day of the plan year simply because the plan document has a plan effective date that is earlier than anyone was eligible?

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I think that's fine, actually.  Lord knows, we always talk here about how they want a 5500 even when there were no participants or assets the ENTIRE year.  It's their sandbox and if you have less than 100 on day 1, you get a pass on the audit.  If they wanted the audit requirement based on the EOY head count, they should have said so.

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