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Business and Policy Areas
Business and Policy Areas
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IRS Issues Publication on Section 403(b) Plans

December 12, 2013

In its recently released Publication 4483, the IRS outlines the most common mistakes made by providers of 403(b)(3) plans. These include:

  • Written plan requirement. Written document(s) that describe the plan and how it works are imperative.
  • Universal availability. If one employee is permitted to make elective deferrals, all employees must be allowed to make them. Certain groups of employees may be excluded, however, such as those working fewer than 20 hours per week.
  • Depositing elective deferrals. Employees' contributions must be sent to plan providers as soon as is reasonable (no later than 15 days following the month of the pay date).
  • Excessive elective deferrals. The general limit on elective deferrals is $17,500 in 2014. If the plan allows, employees may also make catch-up contributions related to years of service and/or if they are over age 50.
  • Employer and employee contributions. The limit on total employer and employee contributions is $52,000 for 2014 ($57,500 for employees over 50).

Tax-Sheltered Annuity Plan for Sponsors also provides additional resources related to 403(b)(3) plans, employer guides, and correction programs available from IRS.

Contact

Mary Bachinger
Director, Tax Policy
202.861.2581
E-mail