Catch up Contributions in a non-calendar year plan

[Guest Steve McD]

I have a client with a 9/30 PYE that has amended their plan to add catch up contributions. The question has come up, are the contribution limits based on a calendar year or the plan year. Since the testing is on the plan year basis, it seems logical that the catch up's would be limited by the calendar year limit for the calendar year in which the plan year ends. In this case, the year 2003 or $2,000 max. I have researched the question and haven't found any commentary about non calendar year plans. That's when I decided to come to the "experts". I'm open to hearing your ideas.

[Guest LKHartnett]

Although I am no expert, Sal Tripodi is . . . I use my ERISA Outline Book(s) for EVERYTHING . . .

at any rate, as the 402(g) limit is a calendar year limit, so is the annual catch-up contribution limit.

And, as you surmised, catch-up contributions are subject to the catch-up limit for the calendar year in which the plan year ends.

See Prop. Treas. Reg 1.414(v)-1(B)(3)

[2muchstress]

Just a few chains before this one, somebody posted a nice worksheet for dealing with catchup contributions for non-calander year plans. It was posted on 9/5/02, and not too far down the page.

[Guest Steve McD]

Thanks, I'll look for it.

[Guest mkelly]

Do you think you have to do anything as of 12/31? in addition to the off calendar plan year end?

[Guest Steve McD]

Sorry to take so long to answer. Been out of the office. I was going to advise the client that the limit is a calendar year limit and that they can apply it that way.