How is the percentage of qualifying plan assets determined for initial plan years?
In the initial plan year, the plan administrator may rely on estimates. The administrator should follow a similar method to the one described in 29 CFR 2580.412-15 for estimating the amount required for the ERISA section 412 fidelity bond for an initial plan year. For example, if a plan will be investing exclusively in assets that meet the definition of qualifying plan assets, for example, insurance contracts and mutual fund shares, bonding in addition to that required under section 412 would not be necessary to meet the first condition for claiming the audit waiver.
Related Questions
- When a new plan is initially funded through the transfer of assets from a predecessor plan, how is the percentage of qualifying plan assets determined for the initial plan year?
- Does the type of account the plan has with a regulated financial institution matter in determining whether assets are qualifying plan assets?
- How is the percentage of qualifying plan assets determined for initial plan years?
