$3,000 Catch-up under 402(g)(7)

[austin3515]

May an employee exceed the $49,000 415 limit by BOTH the 402g7 catch-up AND the 414v catch-up?

[mbozek]

May an employee exceed the $49,000 415 limit by BOTH the 402g7 catch-up AND the 414v catch-up?

Yes See Pub 571 p8 under 15 year rule.

[austin3515]

As a matter of fact I later found in my basic plan document that the $3,000 is subject to the annual additions limitations, whereas the regular catch-up is not.

[Kevin C]

Maybe the language you are looking for is hiding with the plan's deferral limit provisions instead of with the catch-up provision? 1.403(b)-4©(3) says that for someone eligible for the 15 yr catch-up, the 402(g) limit is increased by the amount of the catch-up. For the regular age 50 catch-up, the catch-up is not counted towards the limit.

If your document doesn't allow an eligible employee to exceed $16,500 by both the 15 year and age 50 catch-ups, you may want to look into other document providers' options.

[austin3515]

They can defer 16,500 + 5500 + 3000, but their total additions can only be 49,000 + 5,500.

[Kevin C]

They can defer 16,500 + 5500 + 3000, but their total additions can only be 49,000 + 5,500.

Interesting. It does look like that is how it works. Take a look at 1.403(b)-4©(5) example 7.