457 Deferrals under 415

[Guest AEA]

State government employer has a 401(a) plan (414(h) pickups, employer, and voluntary after-tax contributions) and a 457(b) plan (deferral only). An employee in both could have the following contributed on their behalf:

1. 401(a) plan - up to $40,000 or 100% of compensation AND

2. 457 plan - up to $13,000 or 100% of compensation.

This would be a full $53,000 because the 457 deferrals would not count against the $40,000 allowed under 415. The only thing "reduced" by the 457 deferrals is the amount of includible compensation under 457(b) and the amount of compensation under 415©(3).

Is this right?

Also, as a state government, no nondiscrimination or coverage rules apply (pre- or post-ERISA) so it would be possible to have different vesting schedules for different classes of employees in the 401(a) plan.

Is this right?

Having a hard time getting the Code sections, etc. to confirm.

Thanks! AEA

[mbozek]

1. 401(a) - $41,000 in 2004

2. 457 -$13,000 + $3,000 catch up for employees over 50

total contribution- $57,000

govt plans are not subject to non discrimination or vesting rules. See flush language after last paragraph of IRC 401(a).

[Guest CashBalance]

What is the schedule of increases under EGRTRA?

14,000 in 2006

15,000 in 2007

16,000 in 2008 then what?

[mbozek]

Same as the increases in 402(g) -14k in 05, 15k in 06.