does max qualfied plan contr include extra matching
Max qualified plan contribution for 2024 is $69,000. Assume an employer is already matching 401k contributions, and also funds a defined benefit pension plan. Then the ER freezes the DB plan, and in lieu of funding the DB plan, makes larger contributions to a qualified plan. Will these add’l contributions (that are in lieu of contributions to a DB plan) be part of the $69,000 limit? Does the nature of these add’l contributions (that are in lieu of contributions to a DB plan) have any impact on the answer to the question?
Permalink Submitted by Alan - IRA critic on Thu, 2024-11-07 16:27
Additional annual contributions (larger matching contributions?) will still be subject to the 69,000 Sec 415(c) limit, and the plan administrator should know that.
If the DB plan had been terminated instead of frozen, the cash balance could have been rolled into the 401k without being subject to the 69,000 limit, but with a frozen DB plan this isn’t possible.
For most employees the limit would not likely be exceeded unless the EE was making non Roth after tax contributions.