5500 Compliance Questions for Terminated Plan

How should the IRS compliance question for nondiscrimination testing for "how the plan intended to satisfy" the requirements for a plan that terminated in a prior plan year? The form instructions say to "Check N/A" if the plan is not required to test for nondiscrimination under Code section 401(k)(3), such as a plan in which no HCE is benefiting. I took a look at this section which discusses safe harbor requirements and saw a statement about the final plan year but it still wasn't clear to me all of the exceptions the form instructions were trying to refer to.

There is a reference to the final plan year and says the following:

Quote

(4) Final plan year. A plan that terminates during a plan year will not fail to satisfy the requirements of paragraph (e)(1) of this section merely because the final plan year is less than 12 months, provided that the plan satisfies the requirement of this section through the date of termination and either— (i) The plan would satisfy the requirements of paragraph (g) of this section, treating the termination of the plan as a reduction or suspension of safe harbor matching contributions, other than the requirement that employees have a reasonable opportunity to change their cash or deferred elections and, if applicable, employee contribution elections; or (ii) The plan termination is in connection with a transaction described in section 410(b)(6)(C) or the employer incurs a substantial business hardship comparable to a substantial business hardship described in section 412(d).

Since the plan year relating to this 5500 is one following the plan termination date and is when the final distributions occurred, would N/A be the appropriate response?

The section you quoted is about the requirement that the safe harbor provision be in effect for the entire plan year.

A participant is considered benefiting under a 401(k) plan if they have the option to make a deferral election, regardless of whether they actually make one. If the plan terminated in a prior year and no participant had the option to make a 401(k) election in the current year, then no one was benefiting, and I would check the N/A box.