FAQ 422: Calculations--402g excess message on plan with off calendar year catchup


I don't understand why I got a message that at least one participant whose employee deferrals exceeds the 402(g) maximum. I previously ran a contribution projection and had also run the 402(g). Now, I'm running again to change the profit sharing allocation and received this message. This is a non-calendar plan year and I have also entered the deferrals for the applicable periods on the Catchup Off Year screen.


Because 402(g) is calculated on a calendar year basis, and the valuation calculations are run on a plan year basis, the deferral amounts on the COntributions screen could exceed 402(g) for the plan year. Check the calculated catchup amounts from running 402(g) for the two calendar years, and if they are correct, the plan is probably okay. I have also included a previous answer that I gave another client whose off calendar amounts didn't look correct, in case this isn't it. Send us the plan if none of this works, but be sure to send us the original unreduced deferral numbers so we can try to reproduce the problem.

Previous answer:

It sounds as if either something didn't get saved when running the two-step 402(g) program for off calendar plans, or that the deferral amounts on the Contributions screen are somehow out of whack. Your best bet at this point, if you used the backup/restore option before running the compliance tests, is to run it again using the "Restore Contributions and Forfeitures" option and rerun the two-step 402(g) test, being sure to save changes to the employee record. If you didn't use the backup/restore option, zero out the all of the calculated catchup fields and change the deferral number on the Contributions screen to be the original, unreduced deferral amount. Rerun 402(g) per the off calendar catchup instructions (on the website if you need a copy), save the changes, and then check the Contributions screen deferral amounts.