Here are the Facts:
DB Plan underfunded. Miminum funding amount $400,000. Total Eligible Salary $1,000,000.

If I only have DB plan, total $400,000 can be deducted due to minimum funding.

Question:

1) If I install 401(k) plan with only deferrals can I still deduct the $400,000? Or am I limited to the 25% of comp rule due to DB/DC combo?

2) If I add Match to 401(k) plan and the ER match total is $100,000. Is my Deduction limited to $250,000 or the minimum funding amount of $400,000? I do understand that the $100,000 would not be deductable.

Any thoughts

1) $400,000

2) $400,000

See 404(a)(7)(A) which uses the term "greater of".


(Assumes at least one employee is covered under both plans)

Thank you for confirming.