BG5150 Posted May 14 Posted May 14 I'm getting conflicting info on how discretionary the Enhanced Catch-ups for those age 60-83 is. The Catch-up provision is already a discretionary provision in 401(k) and 403(b) plans. And I understand the new enhanced catch-up rules (super catch-up?) are discretionary too. But to what extent? Can a plan have "regular" catch-ups but not the enhanced c/u? Does the plan sponsor have discretion on both c/u's or just the regular one? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
Peter Gulia Posted May 14 Posted May 14 Under the Treasury’s proposed interpretation, a plan’s sponsor may design a plan to provide only an age 50 catch-up without the age 60-63 catch-up. “The higher applicable dollar catch-up limit for participants attaining age 60 through 63 may, but is not required to be, included in an applicable employer plan. Thus, an applicable employer plan may also be designed to limit the catch-up contributions for those participants to the same applicable dollar catch-up limit that applies for all other catch-up eligible participants.” Catch-up contributions [notice of proposed rulemaking], 90 Fed. Reg. 2645, 2649 fn. 6 (Jan. 13, 2025). CuseFan 1 Peter Gulia PC Fiduciary Guidance Counsel Philadelphia, Pennsylvania 215-732-1552 Peter@FiduciaryGuidanceCounsel.com
RatherBeGolfing Posted May 15 Posted May 15 FTW's document has an opt-out for age 60-63 catch up. Not sure about other providers. ASC did not last I saw it, but that was about 6 months ago and could have changed.
Peter Gulia Posted May 15 Posted May 15 And beyond RatherBeGolfing’s sensible point about what fits a plan’s documents, a plan’s sponsor and administrator might reread its service agreement with its recordkeeper to discern which services are obligated or omitted. Peter Gulia PC Fiduciary Guidance Counsel Philadelphia, Pennsylvania 215-732-1552 Peter@FiduciaryGuidanceCounsel.com
BG5150 Posted May 15 Author Posted May 15 Thanks, all QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
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