Aggregation Required?

[Dougsbpc]

Are benefits accrued under a govermental pension required to be aggreated with pension benefits under a private sponsored DB?

It would be great if anyone had a site on this.

[Guest Carol the Writer]

I doubt it, but I am open to being proven wrong. There is no control or "common ownership" between the governmental employer and the private company, is there?

The only exception is for medical personnel in all hospitals, whether public or private. If the hospital has, say, a 403(b) plan that covers, say the doctors among its participants, then the 403(b) contributions are counted against the maximums that the doctors could receive out of their own private firms.

I do not have a cite, unfortunately, but maybe someone else on this board does. Good luck!

Carol Caruthers, MSPA, EA

[AndyH]

Carol, I don't agree with your 403(b) aggregation comment.

Employee deferrals are aggregated, but not because of any type of business aggregation, but instead because deferrals are limited at the individual taxpayer level, by 402(g), regardless of where they are contributed.

Employer contributions to a private doctor 403(b) or 401(a) plan and employer contributions by a Hospital to a doctor under a hospital 403(b) plan are not aggregated unless the doctor "controls" the Hospital.

But that is all the more reason why your answer to Doug's question is almost certainly correct and for the reason you state.

[Guest mjb]

All 403b contributions are aggregated regrdless of employer b/c employee is deemed to be in control of annuity K. Max contribution is 45k+5k catch up.

403b contributions are aggregated with Q plan of any employer that Dr has more than 50% ownershipinterest in.

403b contributions are not aggregated with contributions to 457 plan.

See IRS pub 571 for details.

[AndyH]

mjb, I do understand that you have background in this area and I respect you knowledge but I am not as yet convinced.

I understand the 50% control on the private plan. But I am referencing employer contributions to a 403(b) sponsored by an employer that the doctor does not control. How are those deemed to be controlled by the employee?

I understand that a non-ERISA 403(b) is deemed controlled by the employee, but employer contributions create ERISA coverage and employer control, no? Can you provide a cite?

[Belgarath]

Take a look at 1.415(f)-1(f).

[AndyH]

Quite clear there. Thanks and my apologies to Carol. I stand corrected, at least effective 1/1/2008.

[Dougsbpc]

Thanks everyone for all the replies.

In reading the final regulations (specifically 1.415(f)-1(f)(2)), it appears that a participant considered to be "in control" of the contract is aggregated for 415 purposes. The 403(b) is considered a defined contribution plan. I can see where this would impact an employer who sponsors a DC plan. Since 415(e) was repealed several years ago, how would this have any impact on a DB?

For example, suppose a University prof retired 5 years ago and now started a profitable business. He had a 403(b) at the University and now wants to adopt a DB plan through his new corporation.