Benefits

Contribution Limits (403(b) Supplemental Retirement Plan)

The Contribution Limits for 403(b) Plans for 2008 are defined as follows: 100% of salary (Section 415 of the Internal Revenue Code) or $15,500 (Section 402(g) of the Internal Revenue Code) or $46,000 (Section 415 of the Internal Revenue Code) – this limit includes Base Retirement Plan (BRP) contributions made by both the employee and MSU
How To Determine Your 2008 Contribution Limit Use the annual salary column below to determine which limit governs your contributions Determine the dollar amount you may defer Annual Salary Limit Contribution Limit $15,500 or less 415 100% of Salary $15,501 up to $203,333 402(g) $15,500* (total must include all Voluntary plan contributions) $203,334 or greater 415 $46,000 (total must include all BRP contributions and all 403(b) Supplemental contributions)
*For employees that are enrolled in the Base Retirement Plan on a Voluntary Basis, your 5% employee contribution must be subtracted from the total contribution limit. To determine if participation in the BRP is on a voluntary basis, you may refer to the Base Plan Eligibility Chart or your MSU check advice (pay stub.) On your check advice, if the retirement contribution is coded as “VOL BSE RET” the participation is voluntary (generally an employee is under the age of 35 and/or has less than 24 Full Time Equivalent (FTE) service months.) On your check advice, if the retirement contribution is coded as “MN BSE RET” the participation is mandatory. The 5% BRP amount would not need to be subtracted from the deferral limit.
Scheduled 402(g) Increases Year Annual 402(g) Contribution Limit 2006 $15,000 2007 $15,500 2008 $15,500
After 2007, cost of living adjustments (COLAs) may allow for additional increases to these limits in increments of $500 per year.
Additional Catch-up Contributions Age 50 Catch-up – any employee who obtains or is over the age of 50 in 2008 is eligible for an additional $5,000 “catch-up” contribution 15 Years of Service Catch-up – Any employee who has at least 15 years of service and a history of low contributions may make additional contributions of up to $3,000 per year, subject to a $15,000 lifetime maximum. Not all employees will be eligible for this provision. Scheduled Catch-up Increases Year Annual 402(g) Contribution Limit Additional Catch-up Limit Total 402(g) Contribution Limit 2006 $15,000 $5,000 $20,000 2007 $15,500 $5,000 $20,500 2008 $15,500 $5,000 $20,500
After 2007, cost of living adjustments (COLAs) may allow for additional increases to these limits in increments of $500 per year.
403(b) SRP Sample Calculations
EXAMPLE #1: Juanita is a 30 year old newly hired Associate Professor with an annual salary of $47,000. How much may she contribute to the 403(b) Supplemental Plan in 2008? Annual Salary =$47,000 5% Voluntary BRP Contributions = $2,350   Limit =$15,500 Minus 5% Voluntary BRP Contributions = $2,350 Available Amount for 403(b) SRP =$13,150
Please Note: Employees hired after the first of the year, will need to prorate their voluntary contributions.
EXAMPLE #2: Roger is a 52 year old CTU member, who has been with MSU for 20 years and has an annual salary of $40,000. How much may he contribute to his 403(b) Supplemental Plan in 2008? Annual Salary =$40,000 Limit =$15,500 Age 50 Catch-up = $5,000 15 Year Catch-up = $3,000 Available Amount for 403(b) SRP =$23,500