jaemmons

Short first plan year?

3 posts in this topic

Initial plan year is from 10/1/2003 thru 12/31/2003. I know that the 415 $limit is not prorated, but what about 401(a)(17) and the integration level? From my understanding, the compensation limit under 401(a)(17) and the maximum permitted disparity level are to be prorated if contributions within a dc plan are based on compensation during this short period.

Is this a correct assessment?

thanks for any replies :huh:

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I agree.

See 1.401(l)-2(d)(5) for pro-ration of the Integration Level, and

1.401(a)(17)-1(b)(3)(iii) for pro-ration of the compensation limit

Hope this helps.

Bob

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Be careful on the 415 issue. If the limitation year is short, then the 415 DC $ limit must be prorated. Often times DC plan documents will define the limitation year as the plan year.

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