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Many
times, an owner in a 401(k)/ Profit Sharing Plan wants to
contribute more money than the $49,000 or $54,500 (with
Catch Up) defined contribution limits allow. |
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For
2009, the maximum contributions are: |
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Salary Deferral
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$16,500 |
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Catch
up (50+) |
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5,500 |
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Profit
Sharing |
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32,500 |
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Total
Contribution |
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$54,500 |
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Using
the illustration below, compare the Combination Cash Balance/
401(k) Profit Sharing Plan to the New Comparability Plan.
Notice that the contribution for each owner increased from
$54,500 to $143,000, yet the cost for the NHCEs is still
minimal at $15,693.
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For
a more detailed discussion of Cash Balance Plans, go to
the U.S. Department of Labor web site where you will find
FAQs about Cash Balance Plans
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http://www.dol.gov/ebsa/faqs/faq_consumer_cashbalanceplans.html
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Compare
the following Combination Cash Balance/401(k) Profit Sharing
Plan to the New Comparability plan. Notice that the contribution
for each owner has increased to $143,000 from $54,500, yet
the cost of the NHCEs is still minimal at $15,693.
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Sample
Combination Cash Balance/401(k) Profit Sharing Plan |
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