Lynn Campbell Posted January 20, 1999 Posted January 20, 1999 With a small DB/MP combination, my plans provided that the MP contrib will be reduced, if necessary, to meet the 25% combination limit. How is the reduced contribution to the MP allocated? do all EEs in the MP share in the reduction or just those who are in both the DB and MP Plans? My MP formula is integrated. Thanks for help.
Lorraine Dorsa Posted January 20, 1999 Posted January 20, 1999 How does your document provide that the money purchase contribution be limited? Most documents do not provide for such a reduction, although I know it can be done. Generally, there are two ways to define a money purchase allocation -- one is to define the dollar amount the employer will contribute by some formula and then to provide a method for allocating the contribution (sort of like a profit sharing allocation)and the other is to define how much will be contributed to each individual by formula with the employer contribution being the sum of the individual amounts. If your plan uses the first option, the amount to each participant will flow from the allocation method. If your plan uses the second method, I would expect it to define how the reduction applies to the individual allocations. ------------------
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