401k and Deferred Compensation Plan for Select Employees

[Guest Louis Gray]

When a company has Both both a 401k and Deferred Compensation Plan for Select Employees and both are pre-tax Plans, how are the percentages calculated from the employees gross earings.

I was told that the Deferred Cmpensation calculation takes precedence over the 401k calculation. The primary retirement account is the Deferred comp and is calculated in full against Gross Earnings. The 401k calculation becomes a secondary adjusted calculation. The 401k calculation would calculate the percentage based on the Gross earnings "less" the Deferred Compensation amount.

I would appreciate knowing if this is correct and how to do it based on say a $250,000. annual salary since I am going to have to communicate this to the eligible employees.

Thanks,

Louis Gray