Maximum Contribution Limits

[Felicia]

An employee terminated employment with a qualified 403(B) entity and received a taxable distribution from the 403(B) plan. About 5 years later the employee has been reemployed by the same 403(B) entity. In calculating the maximum limitations do we take into consideration those years which the employer worked for the entity, even though the previous 403(B) account had been cashed out? That is, do we include those prior years in his Years of Service? Do we include his previous benefits in the calculations event though they are no longer in the plan?

[Guest Brent Rowell]

I think your question is really terrific and hope this thread continues!

I think you really need a legal opinion but thought you may require an immediate reply.

1) "Clearly the employee terminated and did not take leave of abscence (Assuming "qualified" means ERISA) i.e. employer allowed 403(B) withdrawl.

2) I believe you should check and be sure the employee is being treated as "a new hire"

3) I think you should be able to treat employee as "new hire" for 403(B)

Brent

[Guest C Kampen]

Check the new IRS 403(B) audit guidelines as well as IRS Publication 571. I don't believe the definition of years of service for the MEA calculation would permit exclusion of those years prior to termination. But those places are where I'd go to research.

[This message has been edited by CVCalhoun (edited 10-20-1999).]