401(a) plans and Section 415 Limits

Submitted by Michael Heburn on Mon, 2020-03-02 19:40

How are 401(a) plans treated when looking at section 415 limits? Do you need to aggregate 401(a) contributions with any other plan type like 403bs or 457?



Submitted by Alan - IRA critic on Tue, 2020-03-03 01:25

You can’t equate the Sec 415 limits in terms of code sections. For example, Sec 415b applies to DB plans and 415c applies to DC plans. The limits are also basically “per employer”, not per employee. However, there are some strange rules such as for a 403b plan the employee is treated as the employer, and a SEP IRA is treated as a DC plan. Therefore, a school teacher with a 403b and a SEP IRA for a side job are subject to a single 415c limit for both plans. However, a 457 plan is not subject to these limits, so a school teacher has different 415c limits for the 403b and the 457. I don’t think there is a simple general rule or chart that can be used to simplify categories.

Submitted by Michael Heburn on Tue, 2020-03-03 14:09

I need to know what contribution limits I should be aware of if someone has two employersFrom Employer #1- They have a 401(a) plan & 403(b) planFrom Employer #2- They have a 457 plan and a 401(a) plan. The 403b/457 are separate and not need to be aggregated together but…Do you need to add up the 401(a) plans even though they are from different employers and make sure contributions do not go above $57,000?Do you need to add up the contributions to the 401(a) plan AND 403b plan to make sure they don’t go above $57,000?Do you need to add up the contributions to the 401(a) plan AND 457 plan to make sure they don’t go above $57,000? 

Submitted by William Tuttle on Wed, 2020-03-04 04:38

  • 457b employee deferrals are not subject to the 402g employee deferral limit or included in the annual addition limit.
  • 403b annual additions are not aggregated with other defined contribution (DC) plans (401a, 401k, etc…) of the employer. However, they would be aggregated with any DC plans of any business > 50% owned by the 403b participant.
  • 401a mandatory employee contributions are not subject to the employee deferral limit.
  • Bottom line: The 401a, 403b and 457 employee/employer contributions of unaffiliated employers do not interfere with each other.
  • You could make the full employee deferral limit to each 403b and 457b plan. Each 401a and 403b plan have a separate annual addition limit.

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