Preventing 415 Failure w/ 401K Plan

[Guest Golden401k]

Non-standardized PPD Document. I'm trying to track down the base document, familar with Corbel. Deferral, fixed match, and discretionary profit sharing. A participant has three types of contributions. The employer always gives a 10% pro-rata profit sharing allocation, but what happens if this would cause a 415 excess. Does the plan document prevent me from allocating above a participant's 415 Limit? I seem to recall that I would allocate this excess to others. I guess I could reduce my profit sharing contribution so that in the end no one receives an allocation of more than 10%. Does this sound right to anyone?

[imchipbrown]

Plan doc (or AA) should spell out the ordering.

I have to image a strange circumstance where 415 is exceeded. Really generous match? Really high deferral/comp ratio?

[Kevin C]

The final 415 regulations eliminated some correction methods that were included in plan documents. Make sure you look at your final 415 regulations amendment to see what it says. It probably changes the provisions that were in your document.

[Guest Golden401k]

Not catch-up eligible. His deferral is $15,500 and match is $15,500, then they want to add a 10% profit sharing, which puts him over the limit. I understand the corrective source ordering in the event that you have a failure, but I'm asking whether I can only allocate a profit sharing up to his limit and avoid a failure. Let's just say his ps ends up being 6%, but everyone else gets 10%. The profit sharing allocation formula is pro-rata. Is this a problem?

[Mike Preston]

Yup.