Add-on DB for Union Employee

[drakecohen]

Participant in the WGA (Writer's Guild of America) DB plan makes $500,000 a year from writing.

The WGA plan funds a projected benefit using that income of $125,000 a year at NRA 65.

Can a separate DB plan be set up for the writer to fund the difference to the 415 limit using that income?

Any issues?

Thanks.

[Mike Preston]

Who is the $500,000 paid BY? That entity can set up a plan for the difference.

[drakecohen]

Who is the $500,000 paid BY? That entity can set up a plan for the difference.

Sony Pictures, Inc. which apparently produces the soap opera he writes for. They pay him a salary (don't know if it's 1099 or not) and make a contribution to the WGA plan for him annually.

[Mike Preston]

Sorry, I assumed when you mentioned that HE made $500,000 that HE was paid $500,000 as an employee. I should also have asked how the $500,000 was received. As you state, you don't know whether he receives it as 1099 (making him a sole proprietor) or as W-2 (making him an employee of Sony).

My guess is that he is paid as an employee and therefore he can't have another plan, unless it is set up by Sony for him.

If he is paid as a 1099 then his sole prop can do as you describe.