T wrote:

- quote -

We don't know enough to answer for sure, but the likely
answer is no given the (frankly improper) way those terms
are used to differentiate plans.

First, to be correct a "401(a)" plan is any qualified
employer sponsored retirement plan, whether or not it
contains an employee deferral feature (the 401(k)
provisions). However, employer contributions are not
included in computing the 401(k) elective deferral
limitations.

So unless the employee made elective contributions to the
prior plan, it will not impact the amount that can be
deferred to your plan. And unless that other sponsor is
related in some form to your organization to require
aggregation of plans, it does not impact the maximum
allocation the employee can receive in your plan under
Section 415.

That said, I strongly recommend you bring on board a
competent plan consultant to handle plan matters. The
penalties for fouling up a plan are rather nasty, and the
Department of Labor has less of a sense of humor than the
IRS (all things considered, you want an IRS exam and not a
DOL one for your plan).

Saving money by "doing it yourself" in this area can be very
expensive (and, no, I don't do plan consulting myself--I
consider that I know just enough to be dangerous in this
area).

--
Ed Zollars, CPA
Podcast located at http://ezollars.libsyn.com

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I am an employer who has a new hire about to commence
participation in our 401k plan. The employee has previous
contributions to a 401a plan.

I am assuming that those current year contributions are
added to current year 401k contributions, when ensuring the
employee does not exceed $15,000. Is that correct?

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >