Employee Plan Examination Guidelines and IRC 402(g)(8)

[Guest mike webb]

In Section 13.5.1.2.1 of the updated Examination Guidelines for 403(B) Plans, it is stated that, in theory, an employee who has completed 15 years of service with a qualified organization other than the one at which he/she is currently employed could use the full amount of the 15-year "catch up" election under 402(g)(8) with respect to the current organization. This seems to contradict 402(g)(8) and at least one well-known 403(B) publication, which indicate that the 15-year "catch up" election can only be utilized at the employer for which the 15 years of service had been performed. Which interpretation is correct?

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Mike W.

[Ellie Lowder]

Mike, the IRS had verbally taken the position that the 402(g)(8) limit is employer specific in answer to a question I posed w/Employee Plans Div. in D.C. When the new guidelines came out, I discussed w/those who prepared them once more - and, they have reiterated that it is employer specific.

In the unlikely event an employee uses it up, then spends 15 years with new employer, IRS says it can be used again.