Both a DC and DB plan exist

[Guest Enda80]

When both a defined benefit plan and defined contribution plan exist, how does that affect contribution limtis?

How does that affect the limit on what one person can get?

[Tom Poje]

many moons ago, you were limited in the amount of contribution - possibly the simplest explanation would be that if you were at 62% of the 415 limit (accrued benefit) in the DB plan you were limited to 38% of the 415 limit in the DC plan.

but you had all types of adjustments that could be made and terms like 1.0 calc and 1.25 multiplier, I think there was a 1.4 multiplier and it made a difference if a plan was super-top heavy, and you could do a buy-back in certain cases. I think Mike Preston would refer to those years as the "glory years".

now, a few years ago, they said each type of plan (DB and DC) has its own limit. its only amongst those types that you worry about limits. e.g. you can't get more $46,000 in a combo money purchase and profit sharing plan. The main limits being not on an individual basis but on a deductibility issue for the employer.

I am assuming you are talking about one employer, not someone working for two different unrelated employers.

the deferral limit is usually set no matter how many different employers, but even that can make a difference if you are talking about different types of plans - 401(k), 403(b) and 457 andall the different catch up possibilities involved.

[Belgarath]

If you mean how much can a person RECEIVE from the plan(s), yes, there is a 415 limit as to the maximum payment a person can receive from a defined benefit plan. There is no limit on how much a person may receive from a defined contribution plan. I don't really work with DB plans and I don't have my 415 reference chart handy, but $185,000 per year from a DB plan sticks in my head - but don't take my word for it! There's also a lump sum limit if the DB plan pays a lump sum rather than a periodic benefit, but I have no idea what that number is. Some of the DB'ers here can help you out.

[david rigby]

A DB plan has a limit on the amount of annual benefit that can be paid out.

A DC plan has a limit on the amount of annual contribution that can be paid in.

Neither limit has a direct impact on the other, but there are some instances when the provisions of one plan can impact the other plan under IRC 401(a)(4).

IRC 404(a)(7) contains a limit on the amount of permissble deduction when both plan types cover overlapping groups of employees.

[Blinky the 3-eyed Fish]

Enda, be sure not to forget about 415(e) which, although repealed, can still exist as a limit in the defined benefit document. But if the plan is top heavy, not super top heavy mind you, the employer can provide the enhanced contribution to "buy back" the fraction.

This is an important consideration in 0.00001% of plans and thus I took the time to mention it.