Comp Limit $200,000 for 2002

[Guest Kim S.]

Please help, working contract for a company that stops participants when they reach $200,000 or $11,000 whichever comes first.

Been in this business too long not to know that these limits are PLAN YEAR limits. In order to get the VP to agree with me I have to prove this. I have spent hours looking on the web, through Benefit Links, thru the Rules and Regs only to find that there is nothing that specifically says that the comp limit is looked at on an annual basis.

Please direct me to the backup I need!

[R. Butler]

I'm not sure I understand the question, but the determination period for Compensation is defined in the Plan Document. It doesn't necessarily have to be the Plan Year. The 402(g) deferral limit is a calendar year limit.

[Guest Kim S.]

This plan follows the plan compensation limit of 200,000 as it is imposed by the EGTRRA amendment. The interpretation of this by the VP here is that they are looking at the comp limit and the 402(g) limit at the same time and saying when a participant reaches either the 200,000 salary limit or the 402(g) 11,000 limit they are stopped from payroll deduction. Did I just say the same thing again? Hope I'm clarifying my question.

What you are saying is that I need to look in their document for the compensation definition? Are you referring to their first year of participation and whether the document says to look at salary from entry or for entire plan year? This employee has been a participant for a few years so it is not their first.

[R. Butler]

A participant doesn't necessarily have to quit deferring because he/she hits the $200,000. The Plan may require it, but the I don't see where the law does.

Example: If a participant hits $200,000 in June he has been deferring 4% that would be $8,000. Absent a provision in the Plan to the contrary, the participant could continue to defer until he $11,000.

If this is your question, I know that there is prior post pertaining to this, I don't know how to insert links or I would find it for you.

[Guest Kim S.]

Thank you for the clarification! That is my understanding of this "comp limit" also!

What my question is--Where can I find instructions for this "limit" on how it is applied to the plan in rules and regs? I need to show the correct verbiage to the VP before she will change her mind on this issue.

[R. Butler]

O.K. I found the thread I mentioned in the prior post. Again I can't figure out how to insert the link. If you hit the "Search" button, search just the message boards using the name jin.limledoux (He is the original poster). The message thread is called $170k Limit. Its the only post he/she made, so it should be the only thread you see.

If you use the thread QDROphile sets forth the logic to the conclusion.

Hope this helps.

[Guest Kim S.]

Thanks a bunch, going to find the link now!!!!!

[Appleby]

R. Butler,

To insert a link (URL), go to the address field ( i.e. where the www. Etc is) and highlight the full address. Copy the address and paste it into the note you are writing.

Anyone will then be able to click on the link and access the site.

[R. Butler]

Thanks Appleby, I will give this a try.

http://www.benefitslink.com/boards/index.php?showtopic=12107

[R. Butler]

It worked. I was always trying to click & drag and that never worked. Thanks again

[Appleby]

You’re welcome