cash balance

[jkdoll2]

We have a cash balance plan that started in 2008 - 12/31/09 is the 2nd year and the contribution amount was $215,000.00

that represents the 2.50% to non-highlys and 36% to the owners. There was some interest credits for 2009.

The file says the maximum amount of contribution is only $206,000.00. I know it is because of the interest that was credited.

Can they still contribute the Target Normal Cost at Risk - which is still the $215,000.00? Or will they be overfunded in the contribution?

They want to stay on top of the funding and not get behind and underfunded.

Thanks

[John Feldt ERPA CPC QPA]

Talk to the plan's actuary. Keep in mind that the 404 limit for deduction purposes might need to be coordinated with the DC plan, if they have one. They may be able to contribute an amount that would fully fund the lump sum values of the plan, assuming the plan allows for a lump sum distribution upon termination of employment, but you need to involve the Enrolled Actuary.