401(a) Plans...

[Guest John Compton]

Question: Suppose you were a municipal authority interested in establishing a 401(a) plan in conjunction with a 457 plan. With respect to the 401(a) plan, could both the employer and employee make contributions? What would be the most that any employee could contribute in any given year?

Any information on this topic would be greatly, greatly appreciated!!!

Thanks!!!

[Guest ronc]

It is my understanding that the limit for the 401(a) employer contributions are the lessor of 25% of pay or $30,000. For the 457 plan the current employee contribution limit is the lessor of 25% of pay or $8,000.

We currently have our own 401(a) and use the State's 457 Deferred Comp plan. We are in the process of implementing our own 457 plan with an employee matching component, where we will match the employee's 457 contribution @ 50 % up to a limit. The matching component will go to the 401(a).