Guest Posted September 28, 2000 Posted September 28, 2000 401(k) Plan has 140 participants as of 1/1/2000 and as of 9/30/2000. Client wishes to split plan into two plans (one plan for each of company's two divisions) as of 12/1/2000. Each plan would then have 70 participants. Clearly a CPA audit of Form 5500 is still required for 2000 Plan Year. I believe that a CPA audit would not be required for the two new plans years beginning 1/1/2001, since each of the new plans would have less than 100 participants as of the first day of the plan years. Plan participants have daily valued investments with a national insurance company's group annuity product. To obtain better expenses/prices the client would like to maintain the plans in one contract with the insurance company's records. TPA receives electronic download from insurance company and can produce separate plan level and participant statements on a divisional basis. This is easy since the investments are valued daily. New plans will be identical in provisions. Only difference will be plan name. Question: Are there problems with having the two plans investments in one contract? Does this create a common collective trust and additional reporting requirements?
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