effect of 12/31 on fiscal year for startup plan

[TPApril]

What are the implications of 12/31 for a company whose fiscal year is 6/30 and would like to start up a pension plan? ie do they need to start it up by 12/31 to take any kind of 2012 deduction or is that irrelevant due to the fiscal year?

[Effen]

Deductions are based on fiscal years, therefore the critical date in your situation is 6/30.

[Calavera]

If a plan year will be a calendar year 2012, you will need to sign all plan documents before 12/31/2012. If a plan year wll be 7/1/2012-6/30/2013, the date 12/31 is irrelevant.

[Mike Preston]

If a plan year will be a calendar year 2012, you will need to sign all plan documents before 12/31/2012. If a plan year wll be 7/1/2012-6/30/2013, the date 12/31 is irrelevant.

This is wrong. Even if the plan year will be calendar and the first year is 2013 that can still give rise to a deduction on the 7/1/2012-6/30/2013 tax return. In this case the plan documents need to be signed before the end of the fiscal year. That is, on or before 6/30/2013.

[Calavera]

If a plan year will be a calendar year 2012, you will need to sign all plan documents before 12/31/2012. If a plan year wll be 7/1/2012-6/30/2013, the date 12/31 is irrelevant.

This is wrong. Even if the plan year will be calendar and the first year is 2013 that can still give rise to a deduction on the 7/1/2012-6/30/2013 tax return. In this case the plan documents need to be signed before the end of the fiscal year. That is, on or before 6/30/2013.

I wouldn't say this is wrong. I think you need to sign the plan document by the earlier of the end of the first plan year, or the end of the tax year in which you are going to deduct your contribution. I purposely didn't mention 2013 calendar year as the first plan year, since the 404(o) regulations are not available, and the IRC Section 404(o)(1) refers only to "each plan year ending with or within the taxable year". I understand that the Pre-PPA regulations allowed 3 different choices. We just decided not to take any chances without new 404(o) regulations in place.