Voluntary Employee Contributions - Governmental DB Plan

Is there any provision in the Internal Revenue Code that prohibits voluntary, after-tax contributions to a DB plan?  Put differently, the plan requires mandatory employee contributions based on age of entry.  I'm asking if employees could voluntarily contribute additional after-tax amounts to accounts under the plan. Any insight would be appreciated.

Section 414(k) is still in the law but my understanding is that IRS does not approve any plans permitting those accounts in DB plans.

Ok, I'll bite. 

• Why would anyone want voluntary after-tax contributions to a DB plan?
• What is the proposed method of tracking these amounts?  Crediting any earnings?

On 4/30/2024 at 1:25 PM, david rigby said:

Ok, I'll bite. 

• Why would anyone want voluntary after-tax contributions to a DB plan?
• What is the proposed method of tracking these amounts?  Crediting any earnings?

To be able to purchase an additional annuity upon retirement.  You can credit either actual ROR for the Trust or the pre-determined rate like 5% for example.   It is a design issue, every approach has pros and cons.  I do have a municipal entity client that does exactly that, we are the actuaries, plan doc is handled by attorneys.

Isn't that a CODA (it's voluntary and will reduce pay) and not permitted under the IRS guidance related to the pick-up requirements of 414(h)?

it is after-tax, not 414(h)

22 minutes ago, truphao said:

it is after-tax, not 414(h)

It's the CODA part that's the problem. 

I apologize but I am not following, it was a rough day.  Would you, please, elaborate on where do you see CODA?

So long as the contributions are after-tax and the plan language allows them, they are permitted.  According to the IRS, in a defined benefit plan:

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Generally, the employer makes most contributions. Sometimes, employee contributions are required, or voluntary contributions may be permitted.

Trying to make them pre-tax would violate the rules regarding CODAs.  However, a CODA is defined in Code section 401(k) as an arrangement:

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under which a covered employee may elect to have the employer make payments as contributions to a trust under the plan on behalf of the employee

In this case, the employee is not electing to have the employer make contributions; the employee is electing to make contributions themselves.