415 compensation

[FAPInJax]

Interesting question (I think) because nothing seems to address it directly.

A participant has the following compensation history:

Year Salary Hours

2004 15000 1000

2003 14000 1000

2002 1000 500

2001 10000 1000

The participant did NOT receive accrual credit for the 2002 plan year and therefore the compensation is not included for benefit averaging purposes.

What is their 415 compensation limit??

a) 15000 + 14000 + 1000 = 10,000.00

b) 15000 + 14000 + 10000 = 13,000.00

I was under the impression that no year of compensation is ignored for 415 purposes regardless of whether accrual credit was received.

Any and all thoughts are appreciated.

[SoCalActuary]

My vote is for choice B, since we do not count compensation for years in which no credit is earned. However, this might vary according to the plan document, so I would look to the plan language to be clear. I do not believe that 415 reg's contradict choice B.