ESOP & 401(K) PLANS TREATMENT OF EXCESS ANNUAL ADDITIONS

[Guest M. Martin]

A participant who is over age 50 has an excess annual addition in the amount of $1,050 and had the following contributions:

401(k) $10,478.00

Match $10,478.00

ESOP $20,094.00

Would it be permissible for $1,000.00 of the excess to be considered as a catch-up contribution and therefore only $50.00 would need to be deducted from the plan? Or must the full excess amount be returned in accordance with the provisions in the plan document? (This is for the 2002 plan year)

[WDIK]

Or must the full excess amount be returned in accordance with the provisions in the plan document?

I assume from this statement, that the EGTRRA amendment (Section 631) pertaining to catch-up contributions was not adopted. If that is the case, you cannot classify the excess amounts as catch-up contributions.

[Guest M. Martin]

Catch-up contributions are permitted.

[WDIK]

Perhaps some prior threads would be of assistance.

http://benefitslink.com/boards/index.php?showtopic=20741

http://benefitslink.com/boards/index.php?showtopic=23618

http://benefitslink.com/boards/index.php?showtopic=22632