Deferrals in a short plan year

[Pammie57]

The client has an initial plan year of 9/1/2017 through 12/31/2017;  are the participant deferrals prorated at all.  Or if they defer $18,000 in the 4 months - are they ok since it's an annual limit per participant?

Thanks

[Mike Preston]

No pro-ration.

[Pammie57]

Whew good!  I thought  so, but then doubted myself  Thanks.

[ETA Consulting LLC]

This $18,000 would seem to put them at their prorated 415 Limit for the short limitation year (if the limitation year is in fact the shortened by the short plan year).  But, there is no proration for deferrals.  You can actually have an off-calendar plan year with $36,000 in deferrals.  The point is that deferrals aren't tied to the plan year.

Good Luck!