401(k) Wraparound Arrangement

[Guest T-BONE]

Is it necessary to determine the "allowable deferral amount" in the 401(k) prior to January 31st of the following year? This is implied by the earlier PLRs regarding 401(k) wraparounds, but is not indicated in the most recent (PLR 200116046).

My basic question is whether you have to report the deferrals to the 401(k) that were recast from the deferred comp plan on the W-2 for the plan year being tested or whether its reported on the following year's W-2??

[TCWalker]

Forgive the off the top of my head answer, but I recall the "allowable deferral amount" is required to be determined asaf, and the transfer must be completed by March 15th, and the W-2 info is for the testing/deferral year (amended ?).

I'm deferring to anyone who's done the research. [pun] ?

[R. Butler]

My basic question is whether you have to report the deferrals to the 401(k) that were recast from the deferred comp plan on the W-2 for the plan year being tested or whether its reported on the following year's W-2??

Plan year being tested.

My understanding is the same TC Walker's. Although I am not aware of a requirement that the allowable deferral amount be calculated by January 31st, if it wasn't calculated by that date the W-2 would need to be amended.

[Kirk Maldonado]

Remember the standards used in the PLRs are only important if you want to get a PLR. You may feel comfortable operating such a wrap-around plan on a different basis. However, you should consider getting advice of ERISA counsel prior to doing so.