Multiple IRA Contributions

What is the contribution limit to Employer Funded Plans?

Certain retirement plans, such as

are funded with employer contributions.

For 2006, the employer contribution limit,

the lesser of 25% of compensation or up to $44,000

may be contributed to

• a single money purchase,
• profit sharing or
• SEP IRA plan or
• a combination of these retirement plans (with multiple employers assuming the employers are neither under common control nor members of an affiliated group).

If two (or more) employers are under common control or are members of an affiliated group, the employers are considered one employer and only up to the lesser of 25% or $44,000 of compensation can be contributed between them.

Special contributions rules apply when the employee is also covered by a defined benefit pension plan.