Effen Posted September 4, 2014 Posted September 4, 2014 Lets say I have $250,000 of excess DB assets I am transferring to a QRP. This was a one person plan and the DB participant will be the only participant in the QRP. Lets say his annual compensation is $50,000. Can I allocate $50,000 per year to his DC account since that would be his 415 limit, or do I need to be concerned with the 25% deduction maximum? Seems like I am not taking a deduction, so the 25% limit shouldn't matter, but I am having trouble believing it is ok. The material provided and the opinions expressed in this post are for general informational purposes only and should not be used or relied upon as the basis for any action or inaction. You should obtain appropriate tax, legal, or other professional advice.
Andy the Actuary Posted September 4, 2014 Posted September 4, 2014 Agree. No contribution is being made so deductibility should not be an issue. It would seem this allocation is no different from an allocation of forfeitures. If it were simply forfeitures being allocated, it's likely this question wouldn't not have been asked. The material provided and the opinions expressed in this post are for general informational purposes only and should not be used or relied upon as the basis for any action or inaction. You should obtain appropriate tax, legal, or other professional advice.
david rigby Posted September 5, 2014 Posted September 5, 2014 I have no qualms about the prior advice. Just in case it's relevant, I reviewed the 2014 Gray Book table of contents (cumulative). Nothing on point. Perhaps you can submit this as a question for next year's edition. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
Andy the Actuary Posted September 5, 2014 Posted September 5, 2014 I got a better idea than David's. Don't! Be careful what you wish for. The material provided and the opinions expressed in this post are for general informational purposes only and should not be used or relied upon as the basis for any action or inaction. You should obtain appropriate tax, legal, or other professional advice.
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