Catch-up Contribution Guidance
On October 22, 2001, the IRS issued proposed regulations providing guidance on the requirements for retirement plans offering catch-up contributions for participants age 50 or older.
Click here for the full text of the proposed regulations.
Revenue Ruling 2001-51
In this Revenue Ruling the IRS issued guidance regarding implementation of changes made by EGTRRA to the IRC Section 415 limitations.
The Ruling clarifies that the increased defined contribution limits are not effective until the first day of the first limitation year beginning in 2002. Therefore, the $40,000 limit under EGTRRA is not effective until the first limitation year beginning in 2002. The current $35,000 limit, as adjusted for COLA, still applies to limitation years that begin in 2001 and end in 2002.
For defined benefit plans, the Ruling confirms that the increased Section 415 limits for these plans are effective for limitation years ending in 2002. The Ruling goes into detail on how the new limits are to be applied. In addition the Ruling states that the sunset provisions of EGTRRA can be disregarded in determining both minimum funding and maximum deductible contributions.
Click here for the full text of Revenue Ruling 2001-51.
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