(a) Definition of ``short plan year.'' For purposes of this section,
a short plan year is a plan year, as defined in section 3(39) of the
Act, of seven or fewer months' duration, which occurs in the event that:
(1) A plan is established or commences operations;
(2) A plan is merged or consolidated with another plan or plans;
(3) A plan is terminated; or
(4) The annual date on which the plan year begins is changed.
(b) Deferral of accountant's report. A plan administrator is not
required to include the report of an independent qualified public
accountant in the annual report for the first of two consecutive plan
years, one of which is a short plan year, provided that the following
conditions are satisfied:
(1) The annual report for the first of the two consecutive plan
years shall include:
(i) Financial statements and accompanying schedules prepared in
conformity with the requirements of section 103(b) of the Act and
regulations promulgated thereunder;
(ii) An explanation why one of the two plan years is of seven or
fewer months' duration; and
(iii) A statement that the annual report for the immediately
following plan year will include a report of an independent qualified
public accountant with respect to the financial statements and
accompanying schedules for both of the two plan years.
(2) The annual report for the second of the two consecutive plan
years shall include:
(i) Financial statements and accompanying schedules prepared in
conformity with section 103(b) of the Act and regulations promulgated
thereunder with respect to both plan years;
(ii) A report of an independent qualified public accountant with
respect to the financial statements and accompanying schedules for both
plan years; and
(iii) A statement identifying any material differences between the
unaudited financial information relating to, and contained in the annual
report for, the first of the two consecutive plan years and the audited
financial information relating to that plan year contained in the annual
report for the immediately following plan year.
(c) Accountant's examination and report. The examination by the
accountant which serves as the basis for the portion of his report
relating to the first of the two consecutive plan years may be conducted
at the same time as
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the examination which serves as the basis for the portion of his report
relating to the immediately following plan year. The report of the
accountant shall be prepared in conformity with section 103(a)(3)(A) of
the Act and regulations thereunder.
[46 FR 1265, Jan. 6, 1981]
