Catch up contributions - off calendar year

[Guest revier]

I know there have been several posting regarding catch up contributions but I am still a little bit confused and the ERISA outline book does not specifically answer this question. Any thoughts would be appreciated.

Assume the following facts:

Plan Year October 1, 2003 – September 30, 2004

Participant’s deferral contributions in calendar year 2003 and 2004 are $14,000 and $16,000 respectively

Deferrals are contributed during the following period:

January 1, 2003 – September 30, 2003 - $11,000

October 1, 2003 – December 31, 2003 - $3,000

January 1, 2004 – September 30, 2004 - $16,000

Can the following contributions be made in the plan year October 1, 2003 – September 30, 2004 without violating the 415 limit?

Match Contributions - $8,000

Deferrals -$19,000

Profit Sharing Contributions – $19,000

Total - $46,000

This would assume none of the 2003 catch up contribution had been used in the previous plan year and the participants had catch up contributions of $2,000 for 2003 and $3,000 for the plan year ending 2004.

In an off calendar year plan, can you use the amount that exceed the 402(g) limit from two calendar years.

[Dan]

First, for 2003 you have to classify $2000 of the $14,000 as catch-up. Similarly, you have to classify $3,000 as catch-up for 2004. Otherwise there is a 402(g) violation for each year. As I read ERISA Outlines, Sal seems to indicate you can staddle the plan year end when assigning the catch up. That makes sense if you consider that testing failures can be reclassified to create a passing test.

Hope that helps.