Maximum Contribution Limits

Maximum Benefit and Contributions Limits for 2004-2014

The 403(b) Elective Deferral Limit is the maximum voluntary (pre-tax / after-tax) contribution that can be made to the Baylor University Retirement Income Plan. (Internal Revenue Code section 402(g)(1)).

The 457(b) Deferral Limit is similar to the 403(b) Elective Deferral Limit

The Annual Benefit Limit is the maximum annual benefit that can be paid to a participant (IRC section 415). The limit applied is actually the lesser of the dollar limit above or 100% of the participant's average compensation (generally the high three consecutive years of service). The participant compensation level is also subjected to the Annual Compensation Limit noted above.

The Annual Contribution Limit is the maximum annual contribution amount that can be made to a participant's account (IRC section 415). This limit is actually expressed as the lesser of the dollar limit or 100% of the participant's compensation, applied to the combination of employee contributions, employer contributions and forfeitures allocated to a participant's account.

Calculating Contributions

In calculating contribution allocations, a plan cannot consider any employee compensation in excess of the Annual Compensation Limit (401(a)(17)). This limit is also imposed in determining the Annual Benefit Limit (above). In calculating certain nondiscrimination tests (such as the Actual Deferral Percentage), all participant compensation is limited to this amount, for purposes of the calculation.

  • The Highly Compensated Threshold (section 414(q)(1)(B)) is the minimum compensation level established to determine highly compensated employees for purposes of nondiscrimination testing.
  • Age 50+ Catch up Contribution: Under the Economic Growth and Tax Relief Act of 2001 (EGTRRA), individuals over age 50 can make 'catch up' deferrals.
  • 15 Years of Service Catch-up Contribution: If you have been employed with Baylor University for 15 years, and your average 403(b) contribution has been less than $5,000 per year, you may be eligible for this contribution.

Change Pre-Tax 403(b) and Roth 403(b)

To make changes to your pre-tax 403(b) and Roth 403(b) elective deferrals, you will need to complete a Salary Reduction Agreement and return it to the Compensation & Benefits Office no later than the day before the first day of the payroll period for which it is effective.

To make changes to an existing 457(b) salary deferral agreement, or to enroll in a 457(b) Salary Deferral Plan, you will need to complete the appropriate agreement and return it to the Compensation & Benefits Office one month prior to the effective date of your salary deferral.