Jump to content

Section 409(o) payout limits


Recommended Posts

I have a calendar year ESOP that normally pays over 5 years of installments except for participants with large balances that may be stretched to up to 10 installment payments.

For a participant with a large balance, if the first installment is paid in 2022 based on the 12/31/2021 share valuation; do you use the 2021 or 2022 409(o) limit to calculate how many years in excess of 5 are used?

Link to comment
Share on other sites

Per the EOB, "The indexed amount applies to any plan year beginning in that calendar year."  I would say that you use the 2022 limits for determining distribution amounts to be paid in 2022. 

image.png.49c3c35619fba3ae83a76b7cc1b78696.png

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...