Can Employer Contributions Be Made as Catch-Ups in 457(b) Plans?

Q: I read with great interest your recent Ask the Experts column on making employer contributions to a 457(b) plan, including the fact that total contributions are capped at $23,500 in 2025 (indexed) per participant. Is there a way to get around this limit in a governmental plan where catch-ups are permitted by making an employer contribution in the amount of the catch-up, provided that the employee meets the age requirements (50 for the standard catch-up, and 60-63 for the “super” catch-up)?

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

A: Though the Experts can certainly appreciate your creative thinking in this regard, unfortunately, the contribution limit of $23,500 cannot be exceeded by adding an employer “catch-up” contribution for eligible employees. The reason for this is that Code Section 414(v), which is the Code Section that addresses catch-up contributions for all retirement plans, including governmental 457(b) plans, limits catch-up contributions to elective employee deferrals ONLY. Thus, an employer contribution, by definition, cannot be a catch-up contribution. 


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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