Can a Minister Contribute to Both a 401(k) and 403(b)?

Experts from Groom Law Group and CAPTRUST answer questions concerning retirement plan administration and regulations.

I work with an individual who works a corporate job but is also a self-employed pastor of his local church. Can he make elective deferrals to both his corporate 401(k) plan and his church 403(b)?”

Charles Filips, Kimberly Boberg, David Levine and David Powell, with Groom Law Group, and Michael A. Webb, senior financial adviser at CAPTRUST, answer:

There is nothing in the Internal Revenue Code or regulations that would prevent a pastor from making elective deferrals to his church 403(b) plan in addition to his corporate 401(k) plan. This is true whether the pastor is considered to be a formal employee of the church, or self-employed with respect to his church employment. However, the pastor should keep in mind the following limitations in making contributions to both plans:

  • In no event can the pastor make total elective deferrals to both plans that would exceed the 402(g) elective deferral limit ($19,500 in 2021, $26,000 if age 50 or older as of 12/31/2021). So, for example, if the pastor is age 50 and defers $26,000 in his 401(k) in 2021, he would not be able to make deferrals at all to his 403(b) plan, since there is only one combined limit for both plans.
  • There is also a contribution limit that is applicable to each plan separately known as the 415 limit, which this year is the lesser of 100% of compensation (or earnings from self-employment in the case of his church employment) or $58,000 ($64,000 if age 50 or older as of 12/31/2021). That limit applies to TOTAL contributions to the plan, not just elective deferrals. Usually, the dollar limit is not an issue, but if the pastor is earning a small amount from one of his positions, the 100% of compensation limit can come into play. For example, if the pastor only earns $10,000 at his corporate position, then his total contributions—including any employer contributions, could not exceed $10,000. However, there are some exceptions to this general rule that might apply to the pastor’s church employment; see this prior Ask the Experts column for details.


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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