Effect of amending definition of 415 compensation

[SST73]

For 2014, a plan's definition of 415 compensation was W-2 wages. The plan was restated 1/1/2015, and elected 3401(a) for 415 compensation.

To determine HCEs for 2015, which year's definition of 415 compensation is applied to the lookback year?

I believe it is the 2015 definition. 414(q)(4) simply states 415©(3) compensation is used to determine HCEs, and Notice 97-45 clarifies the determination year & lookback year periods, but I find nothing that addresses the effect of a change in the definition of 415 comp.

If I think about a new, start-up plan, HCEs would be determined based on the plan's "new" definition of 415 compensation, applied to the lookback year preceding the adoption of the plan.

Can anyone confirm/clarify?

Thank you in advance!

[Tom Poje]

without trying to research, does the change even make a difference?

according to the ERISA Outline book about the only differences between 3401(a) and W-2 are

1. odd items like non-cash comp for ag labor is excluded from 3401(a) but included in w-2

and

2. excess group term life insurance is included in W-2 but not in 3401(a)

[RatherBeGolfing]

You are correct, you are operating under the terms of the document. The fact that you are looking at a lookback year for HCE's is irrelevant.