Compensation determination for 415 limits

[Jakyasar]

Hi

Facts:

Company ABC owned over 80% (but not 100%) by Joe and sponsors DB plan (started 2021)

Company XYZ was owned by Joe 60% but sold in 2020 (i.e. not in existence when the plan has started)

In each case, the remaining ownerships were unrelated.

Joe has 125k average salary since 2021 paid from Company ABC that is used for DB plan purposes.

Going back to years 2015/2016/2017 (*prior to plan inception), Joe had 150k salary each from Company ABC and Company XYZ i.e. 300k in total/per year.

To determine Joe's 415 lump sum for 2024, what is Joe's salary?

Assuming that you can use the 300k average (obviously limiting to 401(a)(17)), can you point to a code section to back this up or a starting point?

Thank you

[CuseFan]

You can use historical compensation, including prior to plan adoption, from the entity sponsoring the plan and from any entity within the control group - which ABC and XYZ were not a control group. Joe would have had an aggregated 415 limit IF both ABC and XYZ sponsored DBPs but I don't see you being able to use historical XYZ compensation. I think Joe has 415 FAE of $150k from ABC 2015-2017.

[Jakyasar]

The fact that they were CG back in 2015-2017 has no effect on what you are saying i.e. as only ABC is still in existence, you can only use ABC?