Guest wwc870 Posted April 3, 2001 Report Share Posted April 3, 2001 If a participant is part of a 403(B) and a 401(a) plan, are they still subject to 415© testing? Link to comment Share on other sites More sharing options...
rcline46 Posted April 3, 2001 Report Share Posted April 3, 2001 you have not given critical information - this participant - what is his/her relationship to the sponsor of the 401(a) plan? 402(g) will limit elective deferrals to 10500 no matter what because that is an individual limit, not a plan limit. Link to comment Share on other sites More sharing options...
Guest wwc870 Posted April 4, 2001 Report Share Posted April 4, 2001 This participant is an employee of the company which sponsors both of these plans. Link to comment Share on other sites More sharing options...
MWeddell Posted April 4, 2001 Report Share Posted April 4, 2001 The participant is treated as the sponsor (for 415 purposes) of his/her own 403(B) contract, regardless of whether the 403(B) plan is an ERISA plan. If the participant is only an employee of his/her employer, there will be a separate 415 limit for the 401(a) plan. The 415 limit on the 403(B) limit will be aggregated with any other 403(B) arrangements in which the participant contributed this year. Link to comment Share on other sites More sharing options...
Ellie Lowder Posted April 7, 2001 Report Share Posted April 7, 2001 However, if the participant elects catch up Option C, there is only one 415© limit for both plans. Link to comment Share on other sites More sharing options...
Guest mike webb Posted August 21, 2001 Report Share Posted August 21, 2001 Does new Code Section 415(k)(4) (below) as added by EGTRRA, affirm the separate 415 limits for 401(a) and 403(B) plans when the person does not own or control more than 50% of the 401(a) sponsoring employer and Special Election 'C' (no longer applicable in 2002 and beyond) is not used? It seems clear that this section recodifies the separate limits, but I've seen at least one publication from a major consulting firm that states the opposite conclusion. (4) Special Rules For Sections 403(B) And 408.-- For purposes of this section, any annuity contract described in section 403(B) for the benefit of a participant shall be treated as a defined contribution plan maintained by each employer with respect to which the participant has the control required under subsection (B) or © of section 414 (as modified by subsection (h)). For purposes of this section, any contribution by an employer to a simplified employee pension plan for an individual for a taxable year shall be treated as an employer contribution to a defined contribution plan for such individual for such year. Link to comment Share on other sites More sharing options...
Ellie Lowder Posted August 23, 2001 Report Share Posted August 23, 2001 The consensus is that we still have the two separate 415© limits, and the section you quoted, Mike, is a technical correction to the prior repeal of 415(e). Keep in mind that you must aggregate the 415© limits in situations where a 403(B) participant has an outside business which he or she controls, and has a qualified plan or a SEP. Finally, Option C will not be an issue after January 1, 2002, since as indicated, it is repealed. Link to comment Share on other sites More sharing options...
Guest mike webb Posted August 23, 2001 Report Share Posted August 23, 2001 Wonderful Ellie! Thanks for the clarification. Link to comment Share on other sites More sharing options...
Belgarath Posted August 27, 2001 Report Share Posted August 27, 2001 I was wondering about this myself. I didn't look at the conference committee report on this, because I deal very little with 403(B)'s. Was this intentional, or is this a likely target for a technical corrections bill, since EGTRRA axed the exclusion allowance calculation, thereby making the 403(B) tantamount to the "old" C election? Obviously you use the law as is until changed, but for those of you more in tune with the 403(B) world, would appreciate your thoughts on this. Link to comment Share on other sites More sharing options...
Ellie Lowder Posted August 27, 2001 Report Share Posted August 27, 2001 If you mean "was the intention to allow two separate 415© limits - one for 401(a)/401(k), and another for 403(B)" - I am assured it was intentional. Keep in mind that the ownership and control issue (e.g., participant owns/is in control of the 403(B) plan)has been the case with 403(B) plans for as long as I can remember (and that is a long time), and, with the exception of catch up option C, has always resulted in two separate limits when the plans are sponsored by the same employer. The technical corrections in EGTRRA was because the language needed to be re-added after the repeal of 415(e) unintentionally took it away. The only real change for next year in that particular issue is that option C goes away - thus, there will be two limits (except in the case of ownership of an outside business as I said. On the other hand, I never say never. Have already heard an unsubstantiated rumor that 403(B) "non-aggregation" may be the topic of new legislation at some point - after all, it flies in the face of benefiting rank and file employees and is usually constructed to benefit the honchos. We'll see. Pretty strong lobbies want to keep it the way it is. Link to comment Share on other sites More sharing options...
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