switching from 5500-SF to full 5500

[Pixie]

Client has 105 account balances (125 participants) at the beginning of the plan year.  I am assuming we can use the 80-120 rule to continue filing the 5500-SF until the number of account balances exceeds 120 as of the beginning of the plan year.  Any input would be greatly appreciated.

[RatherBeGolfing]

2 hours ago, Pixie said:

Client has 105 account balances (125 participants) at the beginning of the plan year.  I am assuming we can use the 80-120 rule to continue filing the 5500-SF until the number of account balances exceeds 120 as of the beginning of the plan year.  Any input would be greatly appreciated.

Im assuming this is not the first year filing a return for the plan, and you filed an SF for the prior year?

If so, you can continue to file an SF until you cover more than 120 participants and meet the other eligibility conditions (total of eight conditions).  See instructions to the 5500-SF, page 3, Who May File Form 5500-SF, for all conditions.

[Cherry Park Advisory]

One nuance here is making sure you’re applying the current participant-count methodology. For defined contribution plans, the determination is generally based on participants with account balances at the beginning of the plan year. If there are 105 participants with account balances and the plan otherwise meets the Form 5500-SF requirements, the plan would still be treated as a small plan. Of course, you’d also want to confirm the plan satisfies the other Form 5500-SF eligibility conditions.

[BG5150]

8 hours ago, Cherry Park Advisory said:

Of course, you’d also want to confirm the plan satisfies the other Form 5500-SF eligibility conditions.

Good point.