Combined Plan Limit

[Pension RC]

If a person has a DB Plan and a SEP, and they contribute the $52,000 limit to their SEP, are the two plans subject to the 31% limit? In other words, is it true that the combined SEP and DB contributions can't exceed 31% of earned income? Thanks for any responses!

[Lou S.]

A SEP is treated like a DC plan. That is to say you can't skirt the decudtion limit by putting in a SEP instead of a PSP.

[AndyH]

The first issue is that most SEPs have an exclusive plan requirement, in which case the contribution limit is $0,

If not for that issue, the limit would depend on whether or not the DB plan were subject to PBGC, first. If so, no combined limit. If not, either the combined contribution must be limited to 31% or the DC is limited to 6% or less and the DB has it's independent limits.

[Pension RC]

Thanks!