Hi,
New plan established 4/1/03. Can the employer consider compensation paid prior to 4/1/03 in determining the 25% deductible limit? The definition of plan compensation excludes compensation prior to the effective date of the plan, but for deduciton purposes, I was hoping to use full year pay.

Any help would be greatly appreciated.
Thanks!!!

The deduction limits are always based on compensation paid during the fiscal year, aren't they? Plan compensation has nothing to do with it, does it?

Hi,
I definitely know that the definition of plan compensation does not dictate the definition for deduction purposes. For example, plan comp could exclude overtime, bonuses, yadeeya....but deduction comp is a differently defined animal.

BUT, I still don't know if the employer can take into account compensation before the effective date of the plan to determine deductibility. Where is my ERISA outline book when I need it.

Thanks for the input.