Limitation year is not calender year

[FJR]

Just want to confirm this with anyone:

Plan year ends 3/31/02. Limitation year is the plan year. We are using the following.

Annual addition = 40,000

Compensation = 170,000

Salary Deferral = N/A

Now for EGTRRA, the company has not signed off on any amendment yet. Does the new EGTRRA laws still go into effect starting after 12/31/01. For example can the new 415 limits go into effect for the 3/31/02 PYE? What others are effected? Any other insight would be appreciated

[Guest JEP]

402(g) is a calendar year limit

Compensation Limit 401(a)(17) - plan year limit

Deduction Changes - Plan Year

415 - plan year

Top Heavy - plan year

match contribution/vesting - plan year

All "plan year" changes start with the plan year beginning after December 31, 2001.

[Belgarath]

For DC plans, the EGTRRA increased Section 415 limit is for Limitation years beginning 1-1-2002 or later. So in your case, it is 25%/35,000. The EGTRRA compensation limit is for Plan years beginning 1-1-2002 or later for benefit and allocation purposes, for fiscal years beginning 1-1-2002 for deduction purposes. This can get confusing if your plan, fiscal and limitation years years don't coincide.