mental block... Max Allocation... SH MATCH/pro rata ER

[K-t-F]

I have a plan... 3 ees

Comp/deferrals

1- 168,000/15,500

2- 142,000/15,500

3- 37,000/0

SH Match...

What is the max contribution for this plan?

Please display each EEs ER contribution.

Thanks!

[pmacduff]

If you put in any non-elective ER contribution and the plan is top heavy, then employee #3 will need at least 3% for top heavy.

Is the PS formula cross tested or comp to comp or something else?

which SH match are you using...the basic formula of 100% up to 3% and 50% of the next 2% or a straight 4% or something else?

Can't give you numbers without more info....

[John Feldt ERPA CPC QPA]

If the plan only has a Basic Safe Harbor match, then:

EE 1 match = $6,720

EE 2 match = $5,680

EE 3 match = $0

If the plan is also ACP safe harbor, then that's it, otherwise you'll need to test ACP.

If you have other contributions (profit sharing, nonelective) The deferrals are not counted against the 404 deduction limit. That leaves you with the 25% of eligible compensation for a deduction under 404.

That is 25% x $347,000 = $86,750 overall.

Your allocation formula will dictate how much of the contribution will go to each participant.

Assuming no one is over age 50 (if either of the deferring employees are, then the results below can change due to catchup).

The max ER allocation to #1 is $29,500, reduced by any match

The max ER allocation to #2 is $29,500, reduced by any match

The max ER allocation to #3 is $37,000

Of course you couldn't deduct a contribution that exceeds $86,750, so not all 3 employees can max out based solely on employer contributions. If you have forfeitures that are allocated, then your total allocation could exceed $86,750, but can't be more than $96,000.