415 limits in DC plans

[Santo Gold]

Doctor is 100% owner of a small office, of which only he and his wife are employees and his compensation is around 120,000. They maintain a 401k plan. The doctor is also a minority owner (25%) in another office of doctors. This office also has a 401k plan. The doctors compensation is around $175,000 from this practice.

For 415 purposes, can the doctor achieve $45,000 in allocations from each business or does the $45,000 apply to him in total, combined from both plans?

Thanks

[Guest Pensions in Paradise]

The $45,000 limit applies to each unrelated entity. So if the two entities are not a controlled group or an affiliated service group, the doctor could receive $45,000 under each plan.

With that said, you should confirm whether this is an affiliated service group. How does the doctor perform servicers with no employees?

[himt4]

I'll answer first and then someone will undoubtedly correct me.

If you are making the point that the two offices are not in a controlled group

or affiliated service group situation, then he can get $45,000 from each of the two separate employers

plans in 2007 (assumes that he is not eligible for catchup).

note #1: for his deferrals in each plan. that is an individual limit, and he cant exceed the 15,500 in total when you add all deferrals together.

note #2: a lot of doctors have a 401(k) plan for their 100% owned medical practice, and a 403b at the hospital where they work. In these case, the doc is restricted to the $45,000 in total because a 403b plan is considered to be 100% owned by the participant which automatically puts it in a controlled group with his own practice. I dont think this rule applies to 401k, hence the different answer I gave above.