DB & DC combination

[Earl]

A person is very young but making $350,000. I want to install DB & DC Plans. If the DB contribution is 25% or greater I am pretty clear that she can contribute another 6% under the Profit Sharing Plan for a total of 31%.

If the person is so young that the DB contribution is, say, 20% can you then contribute 11% to the PS?

IRS Notice 2007-28 (basically, I think) says to ignore the first 6.00% of Profit Sharing contributions. So can she make 6% of ignored contributions and then 5% to get to 25% (11% total to the Profit Sharing?)

Or is the extra 6% available only if the DB contribution is 25% or more?

Thank you

[Guest Dave Peckham]

Earl,

see this discussion from October 15, 2007

http://benefitslink.com/boards/index.php?s...c=36916&hl=

I agree that if the PS contrib. is at least 6% of comp, then the combined limit can never be less than 31%.

[Earl]

Thank you

E