When do you change from a “small plan” to a “large plan”?  What’s the over 100 participant rule verses the 80 to 120 participant rule?  Am I eligible for a waiver even if I’m over 100 participants? The rules are confusing indeed. 

In layman terms, regardless of the confusing 100 participant rule that is mentioned throughout the IRS Form 5500 instructions and the Department of Labor (DOL) regulations, a 401k plan is not required to have an audit until the year after it breaks the 120 participant threshold (under the 80-120 participant rule).  There are some exceptions though, for example, if the plan assets are not held by a regulated financial institution. 

Please note that this article provides only general guidance.  Not all rules and requirements are reflected.

 

See additional articles:

What is the 80/120 Rule?

Small Pension Plan Audit Waiver Regulation