Snapper Posted March 5, 2021 Share Posted March 5, 2021 Plan contains the following provision: "Solely for purposes of determining the amount of an employee's Pick-Up Contribution, Earnings shall be determined without regard to the limit on Earnings imposed by Code Section 401(a)(l7)." Is that acceptable? If so, any cite. Link to comment Share on other sites More sharing options...
Peter Gulia Posted March 5, 2021 Share Posted March 5, 2021 Is the plan a defined-benefit pension plan? Or is the plan an individual-account (defined-contribution) retirement plan? That distinction might matter for how a § 401(a)(17) limit applies regarding an accrual or a contribution. If the plan is a defined-benefit plan, what is the promised benefit? Which State's law applies? Peter Gulia PC Fiduciary Guidance Counsel Philadelphia, Pennsylvania 215-732-1552 Peter@FiduciaryGuidanceCounsel.com Link to comment Share on other sites More sharing options...
Luke Bailey Posted March 6, 2021 Share Posted March 6, 2021 So say I make $400k. Plan has mandatory contribution of 4% of pay, so mine is $16,000, not $11,600. By the pan provision, they are capping at $290,000 for 415(b) or (c), and their argument may be, "Hey, IRS, what difference does it make. We are using the $295,000 for Code rules, and this guy (or gal) could have got $16,000 if we had raised his/her contribution rate to 5.517%." Clearly in terms of "plain meaning" of "taking into account," they've done that, but if the provision has a DL, I could see them running with it. Luke Bailey Senior Counsel Clark Hill PLC 214-651-4572 (O) | LBailey@clarkhill.com 2600 Dallas Parkway Suite 600 Frisco, TX 75034 Link to comment Share on other sites More sharing options...
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