Include Participant in Cross-Testing?

A profit sharing plan accepts rollovers on behalf of employees who haven't met the plan's eligibility requirements.  I would image such employees would technically be considered participants and included in the participant count for Form 5500 purposes.  Would you include them in the annual testing before they meet the eligibility requirements?

No.

I agree with Mike.

They do NOT count for testing until they meet eligibility. 

The DO count as a participant for 5500 purposes (but not as an active participant)

11 hours ago, mming said:

A profit sharing plan accepts rollovers on behalf of employees who haven't met the plan's eligibility requirements.  I would image such employees would technically be considered participants and included in the participant count for Form 5500 purposes.  Would you include them in the annual testing before they meet the eligibility requirements?

Of course not.

Actually, I don't think they count as a participant on the 5500, either. 

But I can't find a cite to that currently....Does anyone else remember a cite from either a Janice Wegesin or Steve Forbes 5500 manual that addresses this?  They're "limited participants" and for some reason I recall reading not to include them. 

(Willing to be proven wrong here, though....)

20 hours ago, Bri said:

Actually, I don't think they count as a participant on the 5500, either. 

But I can't find a cite to that currently....Does anyone else remember a cite from either a Janice Wegesin or Steve Forbes 5500 manual that addresses this?  They're "limited participants" and for some reason I recall reading not to include them. 

(Willing to be proven wrong here, though....)

They count.  Just like a participant who used to be eligible but is now excluded counts as a participant if there is an account balance.

I can't give you a cite but I know that Janice's book used to point out that such a participant is not included as an active participant in the line by line section.  Maybe that is what you remember?

Must be eligible for a nonelective contribution of some form under the Plan.

On 1/12/2019 at 1:27 PM, RatherBeGolfing said:

They count.  Just like a participant who used to be eligible but is now excluded counts as a participant if there is an account balance.

I can't give you a cite but I know that Janice's book used to point out that such a participant is not included as an active participant in the line by line section.  Maybe that is what you remember?

Hmm, that might be it, indeed.  Of course, then you run the chance of the "number of participants with account balances as of the end of the plan year" exceeding the total of the subcategories (6a2, 6b, 6c, 6e) that a rollover-only person doesn't actually fit in any of.