Employee Benefits Bulletin, December 2001
CATCH-UP CONTRIBUTION UPDATE UNIVERSAL AVAILABILITY REQUIREMENT POSTPONED
The December 2001 Employee Benefits Bulletin contained an article describing EGTRRA catch-up contributions and the new proposed regulations issued by the IRS as guidance. The proposed regulations outlined the "universal availability" requirement, which provides that if an employer makes catch-up contributions available under one of its qualified plans, then ALL qualified plans of the employer (including plans of companies within the employer's controlled group) that permit elective deferrals must offer catch-up contributions to eligible participants. Additionally, since all catch-up eligible participants must be provided with the opportunity to make the same dollar amount of catch-up contributions, all qualified plans of the employer must begin offering catch-up contributions as of the same effective date or there will be a period during which catch-up contributions are offered to some catch-up eligible participants but not to all.
In order to ease the administrative burden of the implementation of the catch-up contributions, the IRS extended the deadline for satisfaction of the universal availability requirement through Notice 2002-4. Now, different plans maintained by the same employer may adopt catch-up contributions beginning on different dates during 2002, provided that all such plans begin offering catch-up contributions no later than October 1, 2002.
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