Combination DB & DC Plans

[Guest Gee Bee Fran]

I have a contractor client who has union employees and office staff. The union employees participate in a union sponsored DB plan and the employer contributes $4.8 per hour to the union db plan. I am comfortable with the deductibility issue for the company. My question is how do you calculate the 415 limit for each participant? I have 401(k) contributions and a modest employer profit sharing. I would appreciate any thoughts you could provide to help. Many thanks for your efforts on our behalf!!!

[John Feldt ERPA CPC QPA]

For the DC plan(s) 415 limit: The $4.80 per hour contribution that goes into the DB plan does not count as an annual addition for purposes of the 415 limit for the DC plan(s), unless the DB plan provides for and somehow considers these amounts as after-tax voluntary contributions (unlikely).

For the 415 limit in the DB plan, your actuary can help you with that. In a DB plan, the benefits accrued are limited by 415, not the contributions.