After-tax contribution limitations

[Guest Suanne]

Is there a limit on after-tax contributions that can be put into a defined contribution plan, other than the 415 limit? Rev Ruling 80-350 had a 10% limit on compensation aggregated over all years of participation, but I see that Rev Ruling 93-87 made Rev Rul 80-350 obsolete.

[namealreadyinuse]

Nope.

[Guest Pensions in Paradise]

Remember that after-tax contributions must be included in the ACP test for nondiscrimination.

[FormsRstillmylife]

My notes show Notice 82-13 and Notice 83-11 reflecting a 10% of compensation limitation on voluntary nondeductible employee contributions.

Regulation section 1.219(a)-5©(1)(ii) as proposed 1/23/1984 (Yes, I know proposed and old.)

© Rules for plans accepting qualified voluntary employee contributions

(1) Plan provision, etc

(ii) If the plan document provides for the acceptance of voluntary contributions, but does not specifically provide for acceptance of qualified voluntary employee contributions, the plan qualification limitation on voluntary contributions (the limit of 10 percent of the employee's cumulative compensation less prior voluntary contributions) would apply to both qualified voluntary employee contributions and other voluntary contributions. On the other hand, if the plan document provides for acceptance of both qualified voluntary employee contributions and other voluntary contributions, the plan qualification limitation on voluntary contributions would apply only to the contributions other than the qualified voluntary employee contributions.

The proposed 415 regulations that are supposed to be effective 1/1/2007 refer to the 10% limitation in examples but do not actually state the rule or provide a cross-reference.

The status of this limitation is very unclear.