Catchup Contributions

[Guest mpark]

A profit sharing plan puts in salary deferral component effective January 1, 2002, but deferrals do not begin until about February, 2002. The maximum limit imposed by plan document is 15% of pay.

A NHCE participant defers 15% of pay in February and continues to defer 15%. Is she eligible to make a catchup contribution?

Technically, she hasn't deferred 15% of pay.

[MGB]

How is the plan administered? Can a person put in the extra 15% for January? If not, she is contributing the maximum and is eligible.

Being an NHCE, 15% of pay for 11 months is going to exceed the $12,000 limit, so yes from that standpoint, too.

[Guest mpark]

It is a Corbel volume submitter document, if you are familiar with it.

The document seems to be silent on the issue of being able to make up the 15% for January. The doc does allow for the deferral of 100% of bonuses, but I don't think this language clarifies the situation.

[Brian Gallagher]

generally it is the compensation for the entire year, just just paycheck-by-paycheck amounts. as long as the "catch-up" deferral isn't more than 100% of a particular paycheck, and for the year she doesn't go over the 15% limit i don't see a problem.

matching, though may be a different story.