Common use of Eligible Employer Clause in Contracts

Eligible Employer. For purposes of the SIMPLE 401(k) Plan provisions, an Eligible Employer means with respect to any Plan Year, an Employer who had no more than one hundred (100) Employees who received at least $5,000 of Compensation from the Employer for the preceding year. In applying the preceding sentence, all Employees of controlled groups of corporations under Code Section 414(b), all Employees of trades or businesses (whether incorporated or not) under common control under Code Section 414(c), all Employees of affiliated service groups under Code Section 414(m), and Leased Employees required to be treated as the Employer’s Employees under Code Section 414(n), are taken into account. An Eligible Employer who elects to have the SIMPLE 401(k) Plan provisions apply to the Plan and fails to continue to qualify as an Eligible Employer for any subsequent year, is treated as an Eligible Employer for the two (2) years following the last year during which the employer was an Eligible Employer. If the failure is due to any acquisition, disposition, or similar transaction involving an Eligible Employer, the preceding sentence shall apply only if the provisions of Code Section 410(b)(6)(C)(i) are satisfied.