401k/ catch up/ PSP

[pgold]

A key employee of a corp. has comp of 70,000,  defers 20,000 (18,000 plus 2,000 catch up).

415 limit   70,000 x .25 = 17,500

If a profit sharing contribution is made to another plan of the same corp. is this key emplyee entitled to 

an allocation?

My thought is no. because the employee reached 415 in 401K plan and PSP doesn't have catchup??

[Belgarath]

I think you are confusing 415 limits with employer deduction limits.

415 limit is the lesser of the maximum dollar amount (53,000 for 2016, 54,000 for 2017) or 100% of compensation.

P.S. - I purposely didn't get into any of the possible quirks - catch-ups, compensation, etc. - just the basic.

[K2]

IAW Belgrath.  The participant's 415 limit is $53,000, of which $18,000 has been used as deferrals.  He can get another $35,000 in other contributions.

[pgold]

Thank you all very much

[Lou S.]

I'd take it one step further since he only contributed $20,000 he still has $4,000 that can be recharatcerized as catch-up for 2016 if the PS allocation is "large".

He can receive an allocation of $39,000 and not exceed his 415(c) limit for 2016.

[Tom Poje]

agree with Lou unless the document is oddly specific in how things are done.

or put another way, if he receives 39000 in ps as Lou suggests plus his 2000 in deferral he has received 59000.  he is over the 415 limit, so catch up comes into play.

If I use the max catch up of 6000 then he has 53000.

if the ADP test was previously run with him at 18000 in deferral it needs to be rerun because an additional 4000 is being treated as catch up.

[K2]

IAW Lou and Tom. An additional $4,000 can be recharacterized as catchup, bringing the total PSP /other sources allocations up to $39,000.