401-K 5500 report

When filing the 5500 report, what is the rule regarding having to attach the "Accountant's Opinion"? Is the rule 100 or more active participants or 100 or more eligible participants? I have 94 active participants but 198 elibible participants. Am I required to attach the "Accountant's Opinion Audit letter"? Even our plan administrator is confused, which really concerns me. Thanks for your help.


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  • I believe that when a plan have over 100 active participants at the beginning of the plan year, they require an audit. Once you require the audit, then you must attach the auditor's report to your annual Form 5500 filing. The truth is that maybe you didn't require the audit after all. Did you have 98 at teh beginning of the plan year?
  • There is a one-year "grace period" in which you can continue to file without an auditor's report. This applies to the first year that you go over 100 participants, but only if you do not exceed 120 participants at the beginning of that plan year. The second year that you have more than 100 participants, you must file as a large plan with an auditor's report. Also, remember, on 401(k) plans, if an employee is eligible to participate, but elects to contribute 0%, he or she is still counted as a participant.
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