In the very first paragragh of the 1.414(v)-1 reg. it states that catch-ups are elective deferrals that exceed the applicable limits ( as long as they don't exceed their own limit, currently $5000) and in Example 6(ii) of the reg. it states "once participant E's elective deferrals for the calendar year 2006 exceed $15,000, subsequent elective deferrals are treated as catch-up contributions ................"

Taken alone these excerpts suggest to me that an elective deferral is classified as a catch-up once the 402(g)(1)(B) is reached - however, we have differing opinions within our department here - some say that the 402(g)(1)(B) need not be reached in order to count a deferral as a catch-up - for example, you could have only a $4000 deferral and another $5000 catch-up on top of that.

There is also an internal debate as to whether or not you need any deferrals to have a catch-up - e.g. could you have $0 deferrals and $5000 catch-up ?

I'm primarily a DB'er and so any insights would be appreciated .

Must exceed some limit to be a catch-up--either 402(g) or ADP (i.e., failed ADP test) or plan-imposed limit. Will automatically be a catch-up as soon as contributed if plan limit or 402(g) limit is exceeded. And, there's no reason that a plan couldn't impose a 0% limit (for all, or only for HCEs), so that entire contribution for those people would be a catch-up. [Also post on the same question in the DB string.]

In layman's terms, a catchup is created when "some limit" is exceeded. That limit could be 402(g), so



is accurate.



That's accurate too, you "could have" that scenario. But to get there, $4,000 would have to be some kind of limit - it could be plan imposed ("participant X cannot defer more than $4,000") or it could be that the ADP testing limit is $4,000.

And yes, you could have $0 regular deferrals and $5,000 catchup, if $0 represents some kind of limit.

I've seen plenty of payroll systems that designate contributions as catchup as they are withheld, but unless a limit is known in advance (402(g), or a plan-imposed limit, or possibly a limit known from prior-year testing), those classifications are subject to further review.

It is possible to have $0 of regular deferrals and $5,000 of catch-up. For example, if you defer $5,000 and receive a $46,000 profit sharing contribution for 2008. But, I don't think you can limit deferrals to $0 and cause catch-ups. Look at the definition of catch-up eligible in 1.414(v)-1(g)(3):



If you limit deferrals to $0, how is that employee eligible to defer without regard to catch-ups?

As Bird mentioned, you can satisfy the universal availability requirement by prorating the catch-up limit over each payroll. But, that doesn't necessarily mean those amounts are catch-ups.

FWIW . . . I haven't read it all, but here's a prior post & its (heated?) discussion concerning whether or not some employees can make only catch-up contributions (i.e., 0% deferrals + catch-up): http://benefitslink.com/boards/index.php?s...tch-up&st=0

It's obvioulsy not cut & dried either way.