The IRS has recently announced the 2021 Maximum Allowable Contribution (MAC) limits for 403(b) and 457 plans.
The elective deferral limit for 403(b)/457 plans will now stand at $19,500. Employees age 50 and over will be entitled to contribute an additional $6,500 to their 403(b) or 457 plan(s) thereby increasing the elective deferral limit to $26,000. Individuals with at least 15 years of service with their current employer may be entitled to contribute up to an additional $3,000 above their age-based limit, potentially increasing the limit to $29,000 for a participant utilizing both the age based and the full amount of the service based catch-up provisions.
If you expect to make or receive a non-elective/employer contribution in 2021, please note that the 415(c) limit has increased from $56,000 to $57,000, permitting employers to contribute up to $57,000 to an employee's 403(b) plan. Recipients of non-elective contributions that are age 50 and up will retain the opportunity to utilize the age based catch-up beyond the 415(c) limitation, allowing for a "combined maximum" of $63,500 in 2021. Please note that the amount of non-elective employer contributions is reduced by employee elective deferrals.
If you have any questions concerning contribution limits, or any other 403(b)/457 matter, please contact OMNI at 877-544-6664.