415 Limit in Year of Termination

[Guest Sherri M. Miller]

Non-calendar year MPPP and PSP plans are terminating 12/31/01 which which will create a short plan year for each. Must the 415 limit for the final limitation year be pro-rated. I know that it must be prorated when a limitation year is changed and a short one is created, but I thought that the full 415 limit can be used in the final year.

Thanks.

[Guest merlin]

You can use the full limit because the plan termination in and of itself does not create a short year.You would only have a short year if your termination documentation created one. Otherwise the only short year will come about if the final distribution of plan assets is made partway through the year.