How Do Section 415 Contributions Limits Work Across Plan Types?

Q: I read your Ask the Experts column indicating that there are separate limits under Section 415 of the Internal Revenue Code for a 401(a) defined contribution plan and a 403(b) plan for most employees. But what about defined benefit plans? Are they aggregated with a 403(b) for 415-limit purposes?

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

A: No, and 401(k) plans are not required to be aggregated with defined benefit plans, either.

There used to be a section of the code—Section 415(e)—that required such aggregation. However, it was repealed by the Small Business Jobs Protection Act of 1996. Since then, individuals have been able to receive the maximum permitted benefit from both a defined contribution and a defined benefit plan, separately.

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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