Guest sdolce Posted August 29, 2001 Posted August 29, 2001 A corporation sponsors a money purchase plan as well as a 401(k) plan. Both run on a 10/1-9/30 year.The corporation's fiscal year is also 10/1-9/30. Normally the increased EGTRRA contribution and deduction limits would not apply until the year ending 9/30/03.Can the plan/fiscal years be amended to accelerate the application of the EGTRRA limits,and therefore the elimination of the MP plan by merging it into the 401(k) plan?
John A Posted September 7, 2001 Posted September 7, 2001 I don't see why not. If you amend both plans to have calendar year plan years, I believe the EGTRRA limits would apply to the 2002 calendar year plan years. Anyone disagree?
david rigby Posted September 7, 2001 Posted September 7, 2001 Makes sense to me. There is probably an important timing issue. That is, would the amendment to the money purchase plan have to be enacted prior to 10/1/2001? You might also have to watch out for vesting for the short plan year. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
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