PS-Deferrals-Catchup in 2 plans

[Cynchbeast]

402(g) limit for 2008 is $46,000. If participant defers $15,500 to PS/401k combo, he can get up to an additional $30,500 Profit Sharing (assuming plan passes all required testing). It is our understanding that if he is over 50/eligible for catch-up, we can actually give him $35,500 and re-characterize $5,000 of his deferrals as catch-up. Results: $10,500 Deferrals + $30,500 PS + $5,000 Catch-Up.

Q: If instead of one combined plan, the sponsor has the 401(k) and PS as 2 separate plans, can the same thing still be done, or can we no longer use the catch-up in the 401(k) to increase the PS contribution?

[Guest Sieve]

Cynch --

(Note, by the way, that the 402(g) limit for 2008 is $15,500--it's the 415 limit that is $46,000 in 2008.)

What's the limit that is being exceeded that permits the $15,500 deferral to be changed to $10,500 with a $5,000 catch-up? None that I see. You can't rechacterize just because you want to, only if some kind of limit is exceeded: like ADP, or 402(g), or 415, or plan deferral maximums, etc.

Now, if you gave the employee $35,500 as a PS allocation, you would reach the limit of a catch-up eligible's 2008 415 limitation ($51,000, which is $46,000 + catch-up limit), and then you would recharacterize the $15,500 deferral as being $10,500 with a $5,000 catch-up.

It would make no difference if this happened with one employer plan or more than one employer plan.