"The additional taxes paid on pre-tax DC contributions (both the 5% phase-out and the10% surcharge) don't (apparently) add to 'tax basis'. So the participant pays tax on these contributions going in and going out. While, for employee contributions, switching to Roth contributions may be a way around paying these extra taxes on 'pre-tax' DC contributions, the Roth contribution rules do not apply to employer contributions... Employer contributions are always pre-tax. Thus, the phase-out and surcharge significantly reduce the value of DC benefits to high paid employees. For those employee-taxpayers, a DB plan would have more appeal."  MORE >>