Code Section 414(h)

[jlf]

What is the maximum contribution a public employer may "pickup"? Does this maximum change for 2002?

Best wishes,

Joel L. Frank:)

[Carol V. Calhoun]

There is no specific maximum on pick-ups, as such. Rather, the limit is that if the pickup contribution is made to a defined benefit plan, the benefit generated by that plan cannot exceed the 415(B) maximum. If the pickup contribution is made to a defined contribution plan, the pickup contribution plus all other annual additions cannot exceed the 415© maximum.

[jlf]

Carol,

With reference to a DC govermmental plan: For 2002, the total of employer and employee contributions may not exceed the lesser of $40,000 or 100% of salary. If the employer contributes $25,000 the employee may contribute up to $15,000, with the $15,000 being a "pick-up" under 414(h)(2). Are you in agreement with me?

Best wishes,

Joel L. Frank