Blinky the 3-eyed Fish Posted August 12, 2002 Posted August 12, 2002 An employer has an existing calendar year profit sharing plan and wants to implement a defined benefit plan in 2002. The plans would be tested together for nondiscrimination and coverage. The only participants in the DB plan would be the 2 owners. The other 2 participants would benefit in the PS plan. My question is: because the two owners are currently participants in the profit sharing plan, would the 404(a)(7) limits have to come into play in 2002 or would an amendment to the PS plan at this time eliminating their participation be allowable to have the 404(a)(7) limits not be considered? I would think they were stuck except for the fact that the employer could always implement another PS plan and achieve the same results. "What's in the big salad?" "Big lettuce, big carrots, tomatoes like volleyballs."
david rigby Posted August 12, 2002 Posted August 12, 2002 401(a)(26) ? I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
Blinky the 3-eyed Fish Posted August 12, 2002 Author Posted August 12, 2002 Pax, there are 4 total nonexcludables. The 2 in the DB satisfies 401(a)(26). "What's in the big salad?" "Big lettuce, big carrots, tomatoes like volleyballs."
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