E.T.A. for "Technical Correction" of 457 limit?

[Guest KCW]

Anyone heard when Congress may tackle the “technical corrections” that will make 457(B) deferral limits 100% of earnings instead of a 50% effective percentage (because, unlike the 401(k) and 403(B) 100% limits, the 457 limit is 100% of taxable earnings)?

[Carol V. Calhoun]

Hmm, are we supposed to be able to predict what Congress is going to do? The experience so far is that they will act sometime between 3 months and 5 years--or never. Certainly, the IRS is going forward with regulations on the assumption that any technical correction is not imminent.

[Guest KCW]

> Certainly, the IRS is going forward with regulations on the assumption that

> any technical correction is not imminent.

Right, on December 7, IRS Office of Tax Exempt and Government Entities Division Counsel/Associate Chief Counsel Senior Attorney Cheryl Press, regarding the three different definitions of includible compensation applicable to Section 401(k), 403(B), and 457 plans, said "it is not for [iRS] to second guess what Congress wanted to do."

Press also emphasized that the regulations are subject to change before being issued.

[Carol V. Calhoun]

I can vouch for that--she and I were on the same panel.

[Guest David G]

To Carol or anyone else who attended the governmental conference in D.C. on Dec. 7-8. Were there any other interesting comments from the IRS or Treasury with regard to interpretation of the new tax law and when additional guidance will be coming out.

[Guest KCW]

Technical corrections are part of HR 3090, signed into law Saturday, 3/9/2002.

More at: http://www.pensioninfo.org/2002_03_01_acv....v.html#75007840

Text and description of Bill: http://www.house.gov/jct/x-12-02.pdf

[Ellie Lowder]

Yep - it did change the compensation definition to make life easier - now the same as 415©(3)!

[Carol V. Calhoun]

The bill text and Joint Committee on Taxation explanation of the portions relating to pension funding and EGTRRA technical corrections affecting benefits are now available by clicking here.