DB/DC Deduction Limit for 2008

[YankeeFan]

Can anyone please confirm what the new PPA deduction limits are for PBGC covered plans for 2008?

If you have a DB/DC combination plans, is the new deduction limit:

(1) 25% of compensation to the DC plan + the 430 minimum to the DB Plan

or

(2) 25% of compensation to the DC plan + the 404 maximum to the DB Plan

I have a DB plan with $0 minimum 430 funding for 2008, but a significant maximum 404 contribution. If the client elects to make a 25% contribution to the DC plan, can they made a deductible DB contribution?

Any input is appreciated.

[ak2ary]

Hate to help a yankee fan but

404(a)(7) does not apply

Determine the max deduction separately for each plan

Both are deductible

Sincerely

AK2ARY

Met Fan

[Guest Sieve]

Technically, IRC Section 404(a)(7) applies--it's just that PBGC-covered plans are not considered as part of the limitation imposed by 404(a)(7). (IRC Section 404(a)(7)©(iv).)

Note, too, that the provision permitting you to ignore PBGC-covered plans for 404(a)(7) purposes is effective for plan years beginning after December 31, 2007--i.e., it does not apply to off-calendar plan years which end in 2008, but just those that begin in 2008 or thereafter.