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401(a) Thrift Plan issues


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I have come up with a question that I’m not sure I know the answer to:  A social service agency we just inherited sponsors a 401(a) Thrift Plan. The only contributions allowed to the plan are discretionary employer “Profit Sharing” contributions; no employee contributions are permitted. The Plan has been filing the Form 5500 series, and, since it has greater than 100 participants, has been audited by an independent accounting firm; however, the last audit performed for the plan was for PYE 6-30-2019. For 6-30-2020, the prior accounting firm attached the company financial statement to the 5500 filing, and for 6-30-2021, the accountant’s opinion section was left completely blank.


I have not personally dealt with a 401(a) plan for a long time, and I seem to remember that 401(a) plans are not subject to ERISA, and therefore, not subject to Form 5500 filing requirements. Therefore, should this thrift plan even be filing a 5500? The though of having to go and do a 6-30-20, 6-30-21 and 6-30-22 audit is making our assurance department head very sickly…..

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A 401(a) plan is just an employer sponsored retirement plan (eg profit sharing or money purchase). If never seen "thrift plan" used in conjunction with 401(a). That's usually reserved for when the staff are contributing.

And, I usually hear 401(a) from non-profit people when they a have a 403(b) in place as well.

William C. Presson, ERPA, QPA, QKA
C 205.994.4070


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This agency also has a "Safe-Harbor" 403(b) Plan, which is also subject to audit, and we're trying to finalize the 2021 calendar year audit at this time. The only other 401(a) plan I saw was back in the 1990's, and it was part of a 401(k) Plan. Yes, I'm that old.....

So if it's an employer sponsored plan, is it subject to 5500 filing and the audit requirement?


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It is subject to a 5500 filing and the audit requirement.  You basically have a profit sharing plan.

The term "thrift" was in common usage many years ago and often meant a plan that had mandatory after-tax employee contributions (not salary deferrals).  Thrift was used to suggest to employees that they needed to manage their money carefully. 

It was a popular plan design bargained for by unions because of the common match feature.

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Thrift has also been used by many a governmental plan. 

Your filing requirements will depend on whether the employer is considered a governmental entity (none) or simply a tax-exempt company (5500 with plan audit). 

Kenneth M. Prell, CEBS, ERPA

Vice President, BPAS Actuarial & Pension Services


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