Can a 403(b) Plan Participant Contribute a 15-year Catch-Up and an Age-50 Catch-Up?

Q: In a 403(b) plan, can a participant contribute both a 15-year catch-up and an age-50 catch-up contribution? And if so, is there a hierarchy for the order in which catch-ups are applied to a participant’s account?

Kimberly Boberg, Kelly Geloneck, Emily Gerard and David Levine, with Groom Law Group, and Michael A. Webb, senior financial adviser at CAPTRUST, answer:

A: Yes, a participant can indeed contribute both a 15-year catch-up and an age-50 catch-up contribution, if the plan allows for both provisions. And yes, there is an important order in which catch-ups are applied to a participant’s account, which can prevent a participant from making both elections, even when the participant thinks he/she might qualify for both.

Per our prior Ask the Experts column on this issue, a plan generally must treat any excess over the 402(g) elective deferral limit ($24,500) as a 15-year catch-up election FIRST when a participant qualifies for the use of both elections. As explained in the earlier column, this ordering rule can limit the ability to utilize the age-50 catch-up and 15-year catch-up elections in the same year.

NOTE: This feature is to provide general information only, does not constitute legal advice and cannot be used or substituted for legal or tax advice.

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