403b and catchup

[Guest Pension Girl]

It is clear from the regs that to use this catchup the employer must be a qualifying organization, for example a school, and the employee must have 15 Years of Service with that employer (although there are special rules for churches). Assuming all of this applies, when applying the calculation, does the 403b plan have to have been in effect for 15 years (or any other deferral plan)? So if the plan has only been around for 5 years but the employee has 15 years of service, can the catchup be used? Also, do you only look at prior plans of that same employer, or do you look back at ANY prior plan that a participant has deferred to, even if with a different employer.

Example - employee contributes $1000 for each of the 5 years that the 403b was in existence, therefore maximum average is 15 years x $5000 = $75,000, less $5000 used = $70,000 available, therefore $3000 catchup can be made for this year?

[fiduciary perspective]

Please refer to page 8 (Chapter 4) under the heading "Figuring Your Years of Service" from Publication 571

http://www.irs.gov/pub/irs-pdf/p571.pdf

Take the following rules into account when figuring your years of service.

Status of employer. Your years of service include only periods during which your employer was a qualified employer. Your plan administrator can tell you whether or not your employer was qualified during all your periods of service.

Service with one employer. Generally, you cannot count service for any employer other than the one who maintains your 403(b) account.