Client with an ongoing safe-harbor 401(k) plan is considering putting in a Defined Benefit Plan (no PBGC coverage) with expected contributions above 31% of pay. Any 404(a)(7) issues in the first year with the new MAP-21 and PPA rates?
For example, assume two participants in 2014:
Salary 401(k) derral safe harbor match
A $200,000 $23,000 $8,000
B $30,000 $3,000 $1,200
Under the new DB plan for 2014 the MAP-21 minimum required contribuiton would be $75,000 and the PPA maximum would be $100,000.
What would be the maximum allowable combined deduction?
Thanks in advance for all responses.