Chapter 5
Limit on Elective Deferrals, Publications

You can use this chapter to determine your limit on elective deferrals for 2001 and 2002.

The final component of MAC is the limit on elective deferrals. This is a limit on the amount of contributions that can be made to your account through a salary reduction agreement.

A salary reduction agreement is an agreement between you and your employer allowing for a portion of your compensation to be directly invested in a 403(b) account on your behalf. You can enter into more than one salary reduction agreement during a year.

This chapter discusses:

• The general limit on elective deferrals, and
• The 15-year rule, an increased limit on elective deferrals.

More than one 403(b) account. If, for any year elective deferrals are contributed to more than one 403(b) account for you (whether or not with the same employer), you must combine all the elective deferrals to determine whether the total is more than the limit for that year.

403(b) plan and another retirement plan. If, during the year, contributions in the form of elective deferrals are made to other retirement plans on your behalf, you must combine all of the elective deferrals to determine if they are more than your limit on elective deferrals. The limit on elective deferrals applies to amounts contributed to:

• 401(k) plans, to the extent excluded from income,
• Section 501(c)(18) plans created before June 25, 1959, to the extent excluded from income,
• SIMPLE Plans,
• Simplified employee pension (SEP) plans, and
• All 403(b) plans.

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