Max SEP w/403(b) & 457
Client deferred $22,000 into his 403(b) and $22,000 into his 457 plan for 2011, both through his employer which is a State University. He also has a SEP for his sole proprietorship that had a profit of $90K.
My question is how the the $49,000 max contribution is affected by the 403(b) & 457. For some reason I thought the $49K is reduced by the 403(b) but not the 457.
Permalink Submitted by Alan Spross on Sat, 2012-04-14 21:38
You are correct.
The following explains how the participant in the 403b is considered to have purchased the annuity and is therefore considered the employer and is also the employer with respect to the SEP. Since the 415(c) limit is “per employer”, there is one 49k limit (now 50K) applying over both plans. The 457 is separate as you indicated.
Further, if the limit is breached, the corrective procedures are the responsibility of the 403b plan and therefore the 403b plan should be inquiring about other plans falling under the 415(c) limit and cap contributions to the 403b.
http://www.tiaa-cref.org/public/about/news/admin0922_133.html