Contributions 

Contributions are made on a pre-tax or post-tax basis through a salary reduction agreementUnlike a 403(b) Plan, 457(b) Plan limits do not have to be coordinated with contributions to 401(k) or 403(b) Plans. Contributions may be made to a 457(b) Plan, even if the annual maximum contribution limit is reached on other retirement plans.

Learn more about:

Types of Contributions

403(b) and 457(b) Plans may receive the following pre-tax and post-tax contributions.

  • Employee Pre-Tax Contributions – Amounts deducted from your wages before tax. These contributions grow tax-deferred. At distribution, income tax will be due on the contribution or investment gain.
  • Roth Contributions (only governmental plans) – Amounts deducted from your wages after tax is paid. These contributions grow tax-deferred. At distribution, if certain conditions are met, income tax is not due on the contribution or investment gain.
  • After-Tax Contributions – Amounts deducted from your wages after tax is paid. These contributions grow tax deferred. At distribution, income tax is due on the investment gain. These contributions are not subject to the annual maximum limitation of elective deferrals.

Employer

  • Matching – Contributions based on a pre-determined formula that matches all or a portion of your applicable contributions.
  • Mandatory – Generally, specific dollar amount or percentage of income allocated based on a pre-determined formula to a defined group of employees regardless of their participation in employee contributions.
  • Discretionary – Contributions with flexibility as to time, amount, eligible participants, allocation, and basis for the contribution.

403(b) Plan Contribution Limits

The combination of both employer and employee contributions may not exceed the lesser of:

  • The amount annually stated by the IRS ($54,000 for 2017)
  • 100% of your salary

Elective Deferrals

Employee contributions may not exceed the lesser of:

  • The amount annually stated by the IRS ($18,000 for 2017)
  • 100% of your salary

403(b) Plan contribution limit is applied across all 401(a), 401(k), and 403(b) Plans, to which contributions for the employee are made for the plan year.

457(b) Plan Contribution Limits

The combination of both employer and employee contributions may not exceed the lesser of:

  • The amount annually stated by the IRS ($18,000 for 2017)
  • 100% of your salary

Visit the IRS website at irs.gov/retirement-plans/plan-participant-employee/retirement-topics-contributions to find the annual amount.



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