415 Limit? Novice need help

[jane123]

From what I understand, if someone has a 403(b) account and also is a participant in a defined contribution plan, the 415 limits apply separately. Which means the total to both could be $82,000 ( $41,000 to each).

But what if the 403(b) owner owns a business and has a plan for the business, is the rule the same? Or is it only one limit of $41,000 total to both plans because it is a controlled group?

Thanks very much in advance.

Jane

[Guest Yanikoski]

You are correct - in the situation you mention, there is only a single 415 limit that applies. The reason there are normally two limits is that the employee is considered to control the 403(b) plan, and the employer controls the 401(k), 401(a) or whatever the other plan is. However, where the employee controls the employer, there is only a single controlling entity (the individual), and therefore only one limit applies. Where the employee of the 403(b) sponsoring organization does not control that organization but instead controls a separate company from which s/he receives compensation, the effect is similar: since the same entity (the individual) controls both plans, there is only one 415 limit in effect. If there were three plans, say a 403(b) and a 401(a) offered by one employer, and a 401(k) offered through self-employment, the 403(b) and the 401(k) thru self-employment would be aggregated under one limit, and the 401(a) would still have a separate $41,000 limit.