Discriminatory Employer Contributions

[Guest bwells]

Employer is a public school district. It wants to amend the superintendent's contract to provide for annual employer contributions of $40,000 to a 403(B) annuity for 5 years after his retirement.

403(B)(12)© excludes governmntal plans from the requirements of 403(B)(12)(A)(i), so it appears that the plan's discrimination in favor of an HCE is permitted. 403(B)(3) counts compensation "for the most recent period" as eligible compensation under 415 for the 5 years following termination.

So, if his compensation exceeded $40,000 in the year of termination, it appears that this could work. (We will assume that there are no problems under state school law.) Am I missing something?