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Pre-tax Employer contribution cannot be > 50% of Pre-tax Employee contribution
We have a pre-tax Supplemental 403b plan where the “Supplemental Employer (ER)” match cannot be > than 50% of “Supplemental Employee (EE)” contribution. When the “Supplemental EE” contributions reach the IRS limit, our “Supplemental ER” matching continues.
We recently added post-tax Roth EE contributions (no Roth ER match). Both “Roth EE” and “Supplemental EE” contributions are subject to the same IRS limit. However, the “Supplemental ER” match can only be up to 50% of the “Supplemental EE” contributions (includes catchup contributions if employee is eligible and elects catchup).
We have some cases where an employee has a higher “Roth EE” contribution than their “Supplemental EE” contribution which is causing the “Supplemental ER” contribution to be >50% of the “Supplemental EE” contribution.