Chapter 3: Qualified Plan Overview

01.Core Concepts

(3 OF 3) • Multiple Plan Limitation • An employer maintains both a defined benefit plan and a defined contribution plan • General rule, maximum deductible amount is the GREATER of:  25% of the employer’s covered compensation, or  The required minimum funding standard of the defined benefit plan • Multiple plan limitation does not apply in following cases: • No employees who benefit under both plans • If the DB plan is subject to PBGC • If a plan is a multiemployer plan • Salary deferrals are not considered for purposes of the combined limits • If contributions to the DC plan do not exceed 6 percent of compensation