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Posted

Can't remember seeing this addressed, so...

Are there any circumstances under which a brand-new 401(k) would now meet the audit requirements in its initial year?  I can see any number of participants being eligible to participate at plan inception, but adding participant balances would take time after the implementation date (i.e. start of the plan year), resulting in no participants with beginning balances.  Am I missing something?

 

Posted

For the first plan year only, the audit requirement is based on the number of participants with a balance at the end of the year.

Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance.

Corey B. Zeller, MSEA, CPC, QPA, QKA
Preferred Pension Planning Corp.
corey@pppc.co

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