Plan a: 401(k) PS Plan
Plan b: DB plan
Plan c: 401(k) deferral only plan
Employee Group 1: All employees IN THIS GROUP are in both plan a and plan b and NOT in plan c
Employee Group 2: All employees IN THIS GROUP are in plan c ONLY (they are all HCE's)
Question: To determine the 25% of payroll, combined deductible limit for the combined Plan a and Plan b, can we include the payroll from Employee Group 2, or are we limited to the payroll for the participants in Employee Group 1 only.
Full Version: Combined Plan - 404(a)(7) Deductibility Limit
Q and A #19 at the fall 2005 ASPPA Conference
Group A is covered by both PS and DB plan
group B is deferral only 401k.
what is 25% deductibility limit?
Answer- it is limited to 25% of comp of group A. see 404(a)(7)(A)(i)
of course, Q and As carry a caveat that they do not necessarily represent the official position of the IRS.
but this one even cites the Code so I would say it is even more reliable.
good gfrief, this Q and A sounds exactly like what you asked.
are you just checking up on us?
Group A is covered by both PS and DB plan
group B is deferral only 401k.
what is 25% deductibility limit?
Answer- it is limited to 25% of comp of group A. see 404(a)(7)(A)(i)
of course, Q and As carry a caveat that they do not necessarily represent the official position of the IRS.
but this one even cites the Code so I would say it is even more reliable.
good gfrief, this Q and A sounds exactly like what you asked.
are you just checking up on us?
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