You are a nonprofit and your organization has a Code section 403(b) retirement plan, but is an independent qualified plan audit required to be attached to the 5500 filing? Let’s look further into the requirement of a retirement plan to attach an independent qualified plan audit to the 5500 filing.
unfunded excess benefit plans maintained solely to provide benefits or contributions in excess of those allowable for tax-qualified plans.
deceased individuals who had one or more beneficiaries who are receiving or are entitled to receive benefits under the plan.
Now, let’s discuss the exceptions to the “large plan” and “small plan” rule above. The first exception to the 100 participant rule is the 80-120 participant rule. The 80-120 participant rule states that you may elect to file as the type of plan you filed in the previous year if your retirement plan benefits between 80 and 120 participants on the first day of the plan year. For example, an organization’s retirement plan had 99 participants in the prior year and filed as a “small plan.” As of the first day of the current year, the organization’s retirement plan benefits 120 participants. In the current year, the organization may elect to file as a “small plan.” In subsequent years, the organization may continue electing to file as a “small plan” each consecutive year that it does not exceed the 120 participant mark. Once the organization’s retirement plan benefits over 120 participants on the first day of the plan year, then the plan must file as a “large plan” and must attach an independent qualified plan audit to its 5500 filing. For further information please refer to ‘I Don’t Want to Grow Up, I Want to Be a Small Plan’ from our Employee Benefit Plan Audit Blog.
the individual owner of the contract is fully vested in the contract or account.
In conclusion, after determining if the plan is covered by ERISA, an organization must determine how many participants its retirement plan is benefiting by counting all active participants, including retired or separated participants and their beneficiaries who still have an account balance in the plan, but excluding any pre-2009 contracts meeting the criteria above for these participants if the plan sponsor elects to exclude them. The resulting number of participants is then used to determine if the plan is classified as a “large plan” or “small plan” filing, keeping in mind the 80-120 exception.