Nondeductible contrib. due to forfeitures?

[John A]

In a defined contribution plan:

If forfeitures are used to reduce employer contributions, and the employer makes a contribution that, together with the forfeitures, would exceed the 404 deductible limit, has the employer made a nondeductible contribution? Or can the forfeitures be placed in a suspense account and used to reduce a future year contribution?

Is the answer different for money purchase and target plans as opposed to profit sharing, 401(k), and ESOP, etc.?

[wmyer]

Forfeiture doesn't count towards the 404(a) deductibility limit. As long as the deductible contributions (i.e. contributions to the plan excluding forfeiture, post-tax, etc.) are less than 15% for a PS plan or 25% for a pension plan, the 404(a) limit has not been exceeded and there are no nondeductible contributions.