Sick Pay contributions

[Guest jim williams]

Can a participant (age 61) of a Sec 403(B) plan with substantial accumulated sick pay, make sick pay contributions to the plan in the form of elective deferrals? I believe he can based on the 401(k) definition of elective deferrals as being amounts not currently available to the employee.

Also, in the post-EGTRRA environment, the maximum this participant can receive in annual additions for 2003 are $12,000 elective deferrals, $2000 regular catch-up, $3000 special catch-up for 403(b) plans, $28000 employer totaling $45000. Is my analysis corrrect?

[Guest Harvey Carruth]

Your analysis is almost correct. My understanding is that the $3,000 extra elective deferral under the 15 years of service rule [402(g)(7)] count as 402(g) elective deferrals, making the total elective deferrals equal to $15,000 [ignoring the extra $2,000 age 50 extra elective deferrals under 414(v)]. This leaves only $25,000 for employer discretionary contributions and a grand total of $42,000.

Another point to consider is that only that portion of accumulated sick leave pay attributable to the most recent period that may be counted as one year of service is eligible to be treated as includible compensation (which is now the definition of compensation in Section 415 for 403(b) plans), so one must be sure that 100% of compensation is at least $42,000.