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Posted

Terminating plan - The termination date is 09/21/2022 and the employee has contributed $27000 ( the 2022 max +Catch up) in deferral contribution.  

* Is the maximum deferral allowed for individuals if the 401K plan only operates for a shortened year, i.e., January 1 through September 21, 2022?

Thank You. 

Posted
2 minutes ago, Belgarath said:

Yes, the 402(g) limit is a calendar year dollar limit. So the fact that the plan is terminating mid-year doesn't alter the maximum dollar deferral allowed.

Thank you!

Posted

I do believe that the maximum Compensation limit for the year of $305,000 will need to be pro-rated for the short plan year period. If it is a non-Safe Harbor plan, this could effect the results of your testing.

 

  • 2 weeks later...
Posted

If you have a short limitation year because of the termination you will need to prorate the 415 limit. This might also effect the the participant if there were "large" employer contributions.

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