415 under EGTRRA

[Guest JBlair]

Another question: If the plan year and limitation year for a defined contribution plan are both 4/1/01 to 3/31/02, is the maximum annual addition limitation for the plan $35,000 or $40,000? It sounds as if EGTRRA states that the new limitation is for years beginning in 2002, thus not including non-calendar year plans ending in 2002?

Can anyone verify what the 415 limit is for a 4/1/01-3/31/02 plan year??

Thanks.

[Guest UKH]

Joel,

I am also trying to find the same answer. I was going to post a similar message. I have gone to many web sites and no where is it crystal clear as to how one should apply the 415 limits under EGTRRA for off-calendar year plans.

We hope the IRS issues some guidance on it.

[MGB]

Although the intent of the drafters was to have it apply to limitation years ending in 2002, the language came out ambiguous. The IRS has indicated unofficially in meetings over the past couple of weeks that they intend to clarify that it will apply to limitation years beginning in 2002.

[Earl]

I thought it was clear....

DB is plan years ending after 12/31/01, and

DC is plan years beginning after 12/31/01

So for DB we are in it now. DC is yet to start.