Creative maximum deductions for 1 participant company/plan

[Gary]

Say a 40 year old, sole owner/participant of a corporation decides to implement a DBPP.

He can choose age 65 as normal ret and fund the 415 limits from age 40 to normal ret and then take his distribution.

However, what about another approach. Say, instead, the participant chooses age 55 as normal ret, funds the 415 limit and takes a distribution at age 55 and terminates the plan. Then the owner decides to implement another DBPP at age 55 with age 65 as normal ret. Now he gets to fund for yet another 415 benefit payable at age 65.

Does anyone have any thoughts or knowledge as to the feasibility and legality of such a strategy?

Thanks.

Gary

[Effen]

Has someone hijacked your handle or is this a trick question, like who is buried in Grant's tomb?

One employer, one 415 limit. The actuarial equivalent of the benefit paid at 55 would generally completely offset any future db benefits from that employer. This ignores the impact of changes in the 415 limit due to Congressional action.

[SoCalActuary]

You can also accrue the benefits over 10 years and terminate the plan at age 50, rolling over the benefits to a DC plan. However, you can only use one 415b limit for your controlled group, affiliated service group or common control companies. If the client wants two 415 limits, they need two different employers.

[Blinky the 3-eyed Fish]

Maybe he could become schizophrenic and the one personality could not tell the other about a new business. Would that work as a viable way to double dip on the 415 limits?

[SoCalActuary]

Well, it works better if each personality has their own SSN

[david rigby]

... who is buried in Grant's tomb?

Mr. and Mrs. Grant?

[Blinky the 3-eyed Fish]

No silly. Then it would be Grants' tomb.

[Belgarath]

Jimmy Hoffa?

[david rigby]

Aha!

http://www.jrn.columbia.edu/studentwork/cn...4-03-15/643.asp

[Guest flogger]

Thanks for the info on Grant's "Tomb". I was always told that his horse was buried next to him. I didn't know that he used his wife as a horse. Leave it to the military!

[mbozek]

B: As everyone in NJ knows, Jimmy Hoffa is buried under the north goal post in Giants Stadium in Rutherford, NJ.

[Belgarath]

mbozek - heckuva bad case of suicide, isn't it? If he isn't careful, Eli Manning is going to be joining him!

Maybe it's really Jim Morrison in Grant's tomb. Pax, neat website article - I didn't know his wife was there either.

[AndyH]

Gary, the most creative maximum deduction I can think of in this situation would be generated by a DB and MP using the flip flop funding technique. But I would never want to administer it. Anybody who would should be buried in Grant's tomb with the horse.