How Are Deadlines for 403(b) Plan Employer Contributions Set?

Q: When is the deadline to make employer contributions to a 403(b) plan for a given plan year?

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

A: This is an interesting question for 403(b) plan sponsors, as the deadline to make employer contributions is generally the same as the deadline (including extensions) to file the organization’s tax return.

However, since tax-exempt organizations do not pay taxes, presumably this deadline would not apply. Instead, the deadline for contributions to be considered an annual addition for 415 limit purposes would likely apply instead. For tax-exempt employers, contributions must be made to the plan no later than the 15th day of the 10th calendar month following the end of the calendar year or fiscal year (as applicable, depending on the basis on which the employer keeps its books) with or within which the particular limitation year (typically calendar year) ends. Thus, if the 2023 limitation year ends December 31, 2023, and the employer fiscal year aligns with the calendar year, 2023 employer contributions must have been made by October 15, 2024, to count as an annual addition for 2023.

For a 403(b) plan that is a money-purchase plan (a relatively rare occurrence), there is a minimum funding deadline of 8.5 months following the close of the plan year (September 15 for calendar year plans). After 8.5 months, the contribution can still be made, but it is subject to a 10% excise tax.

It should also be noted that, even though these are the regulatory deadlines, your plan document could state an earlier contribution deadline. When in doubt, outside retirement plan counsel should be consulted if there is any concern that an employer contribution may not be timely.

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.

Do YOU have a question for the Experts? If so, we would love to hear from you! Simply forward your question to Amy.Resnick@issgovernance.com with Subject: Ask the Experts, and the Experts will do their best to answer your question in a future column.