FAQ 2202: 402g Example - Off-Calendar - No Prior Plan Year Catchup

Problem: How to setup or administer participant catchups for an Off-Calendar plan year with "Prior Plan Year Catchup"

Solution: FACTS for 9/30/2016 plan year 401(k) Contribution for 01/01/2015 to 09/30/2015 $17,994.00 401(k) Contribution for 10/01/2015 to 12/31/2015 $5,528.18 401(k) Contribution for 01/01/2016 to 09/30/2016 $7,692.40 9/30/2015 ADP Excess reclassified as catchup $0 Initially, the CATOFFYR screen will have the below values - LIMITCAT screen shows blank field ($0.00) "Prior Plan Year Catchup" for 9/30/2015 ADP catchup. The Employee - CONTRIB screen shows $13,220.58 deferrals for Plan Year 10/1/2015 - 9/30/2016. Run both calendar year 2015 and 2016 402(g) test. Since the employee did not have any prior year catchup and they deferred $23,522.18 ($17,994.00 + 5,528.18) which is more than 402(g) limit of $18,000 from 1/1/2015-12/31/2015, the 2015 402(g) test would show as $5,522.18 catchup in the "2015 Calendar Year" field. Since the employee did not defer more than $18,000 in 2016, they would have any 2016 402(g) catchup show in the 2016 test. As for the 10/1/2015-12/31/2015 field the $5,528.18 amount was reduced by $5,522.18 for the 2015 402(g) catchup to show as $6.00. ADP deferrals to be tested for Plan Year 10/1/2015-9/30/2016 = $7,698.40. The Original $13,220.58 in the Employee CONTRIB screen is reduced by the $5,522.18 2015 402g catchup to be adjusted and test in the ADP test as 7,698.40. At this point, employee would have full $6,000 left of 2016 catchup that can be reclassified for ADP purposes this year. For additional information please refer to the Compliance Manual which can be accessed from the ASC menu by selecting Help - Manuals. Review information in Appendix 4 pdf page 358. Also, you can view a webcast called "Off-Calendar Year Testing and ADP/ACP Testing" for more information. The webcast can be accessed in Client Support Center by selecting the tab System Training - Web Seminars - Recordkeeping and Compliance.