Bubbles LLC is a web design company that operates out of Boulder, Colorado. Mark and Jeff started Bubbles twenty years ago and it has grown to be one of the more sizable web development firms in Colorado. Bubbles offers a 401(k) /profit sharing plan with a Roth account option. The plan has the following characteristics:

Eligibility: age 21 and one-year of service

Match: dollar for dollar up to 4%

Vesting: 20% per year (years 1 through 5)

Highly compensated definition: uses top 20% election (see page 103 "Highly Compensated Election")

Profit-sharing contribution: Bubbles generally makes sizeable contribution, but the percentage varies

The plan has been amended to permit in-plan Roth rollovers

The plan permits rollovers from other qualified plans and IRAs

Questions:

1. What is the most that Bubbles could contribute to the profit-sharing plan for the current year, and take a deduction for against earned income, assuming the salary deferrals stay constant?

2. What is the actual deferral percentage for the non-highly compensated employees?

3. Assume the company decided to make a profit-sharing contribution that was integrated with Social Security, with an integration level equal to the Social Security wage base. If the base percentage was 10 percent with a maximum excess percentage?

4. How much of an ER Profit Sharing contribution would be made to the plan on behalf of Mark? (disregard the salary deferral and ER match of deferral)

\begin{tabular}{|c|c|c|c|c|c|c|} \hline EE# & Employee & Ownership & Age & Tenure & Salary & Deferral \\ \hline 1 & Mark & 60% & 48 & 20 Years & $200,000 & $10,000 \\ \hline 2 & Jeff & 30% & 49 & 20 Years & $150,000 & $15,000 \\ \hline 3 & Chad & 6% & 33 & 15 Years & $75,000 & $5,250 \\ \hline 4 & Josh & 4% & 42 & 10 Years & $85,000 & $5,100 \\ \hline 5 & Alex & 0% & 58 & 8 Years & $60,000 & $0 \\ \hline 6 & Shay & 0% & 29 & 6 Years & $75,000 & $4,500 \\ \hline 7 & Lisa & 0% & 53 & 4 Years & $50,000 & $0 \\ \hline 8 & Alison & 0% & 19 & 2 Years & $60,000 & $0 \\ \hline 5 & Chung & 0% & 25 & 8 Months & $24,000 & $0 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|} \hline EE# & Employee & Ownership & Age & Tenure & Salary & Deferral \\ \hline 1 & Mark & 60% & 48 & 20 Years & $200,000 & $10,000 \\ \hline 2 & Jeff & 30% & 49 & 20 Years & $150,000 & $15,000 \\ \hline 3 & Chad & 6% & 33 & 15 Years & $75,000 & $5,250 \\ \hline 4 & Josh & 4% & 42 & 10 Years & $85,000 & $5,100 \\ \hline 5 & Alex & 0% & 58 & 8 Years & $60,000 & $0 \\ \hline 6 & Shay & 0% & 29 & 6 Years & $75,000 & $4,500 \\ \hline 7 & Lisa & 0% & 53 & 4 Years & $50,000 & $0 \\ \hline 8 & Alison & 0% & 19 & 2 Years & $60,000 & $0 \\ \hline 5 & Chung & 0% & 25 & 8 Months & $24,000 & $0 \\ \hline \end{tabular}