404 limit for Money Purchase and 401(k) safe harbor plans.

[Richard Anderson]

If the 3% non-elective 401(k) safe harbor contribution is made to a money purchase plan that has no other contribution; what is the 404 deduction limit?

I think it would be 18% of eligible comp (15% for the ps plan plus 3% for the money purchase plan).

Someone else here thinks it would be 25%.

[R. Butler]

Unless the employer is a tax exempt organization, you are correct and someone else is incorrect. The deductible amount to the profit sharing plan is 15% the deductible amount to the money purchase plan is the amount necessary to meet minimum funding standards (in your scenario 3%).