re: Limit on 403(b) contributions

From: "Steve Foulks" <steve_foulks@up.bresnan.net>
Subject: re: Limit on 403(b) contributions
Date: Thu, 30 Jul 1998 18:00:02 -0400

Next Article (by Date): Re: Finding solutions to Social Security "Steve Foulks"
Previous Article (by Date): Credit reports, and gold coins Harry Matthews
Articles sorted by: [Date] [Author] [Subject]

>Date: Fri, 24 Jul 1998 13:28:20 -0500
>From: agrawal@ra.anl.gov
>Subject: Limit on 403(b) contributions?
>I work for a non-profit organization & have a question about
>retirement plan.
>I have a mandatory contribution + employer matched contribution.
>In addition I am allowed a supplemental voluntary (deductible)
>contribution (SRA) which I'd like to max out.
>My employer has a calculation (which is done every quarter)
>& takes into account salary, my age, years of service and
>amount already in SRA. There are 4 different formula & the
>calculation which results in the minimum is contributed.
>Are these specified by the IRS? I thought the IRS just had
>something like 15% (or 25%) of Gross Income with max of $9500?

There is one basic formula in code section 403(b) which says that 20% of
gross taxable salary may be contributed to your 403(b) plan (both you and
your employer's share).

The other 3 formulas you mention are for "catching up" in years where you
did not make the maximum contribution.  There are laid out in section 415(b)
of the IRC.  They are quite complicated.  Most 403(b) vendors can do the
computation for you.  I created a spreadsheet template to do it for me a few
years ago.


>Can organizations have their own limits & formulae?

No this is governed by the IRC.

Steven M. Foulks, CPA, CFP, PhD
<http://www-instruct.nmu.edu/business/sfoulks/>






- -

Go to Jeff Salisbury LWGate Home Page.