HCE is participant in a PSP with one employer & 457 with a different employer

[Moe Howard]

Mr X is a participant in his own Keogh Plan-PSP (he's self employed) ..and.. also Mr X works for a state agency which has a 457 plan which Mr X participates in too.

Mr X contributes $40,000 to his PSP account and also he deferrs $12,000 of his state salary to the state's 457 plan.

Ooops! That means that his annual additions to all his plans is more than the $40,000 IRC 415 maximum limit.

(Is there a problem with this ? Or does the fact that "his sole-proprietorship & the state agency are two separate entities and he owns an interest in only one of those entities", mean that his total account additions to all his retirement accounts is allowed to exceed the IRC max limit?)

[mbozek]

The keogh contributions are only aggregated with 403(b) plan contributions. 457 contributions are not aggregated with a Keogh plan.

[jquazza]

Besides that you should not aggregate the contributions of two unrelated employers for 415 purposes. You only do that for the 402(g) limit. Now, you have to be careful because two employers might not be considered related or part of a controlled group for coverage, but might be for 415 (80% common ownership for coverage vs 50% only for 415.)

So, if you work for two unrelated employers who each provide a plan, you could potentially get $40k in each without violating 415.