Guest merlin Posted July 11, 2002 Posted July 11, 2002 It's my understanding that a plan sponsor may apply the EGTRRA comp limit retroactively without having to demonstrate that the increased benefits are non-discriminatory. Is this correct? If the answer is yes,is this a one-time opportunity?If the sponsor chooses to apply the limit only prospectively as part of the EGTRRA amdment,then at some time in the future decides to make it retroactive,does he still escape the non-discrim issues?
MGB Posted July 11, 2002 Posted July 11, 2002 I think the answers are yes, then no. You get a free pass if adopted at the earliest date; no free pass at any other time. They specifically said this under the 415 limit guidance; I don't think it mentioned the compensation limit in that guidance. However, even if they didn't, it seems the same logic would apply.
Mike Preston Posted July 11, 2002 Posted July 11, 2002 Slight clarification, I think. If the plan uses a safe-harbor, you are correct. If the plan uses the general test, then the resulting benefits are tested as any other benefits under the plan.
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