In order to comply with restrictions imposed by federal tax laws, the Plan is required to limit the maximum contributions you and RIT can make during any plan year. These limits restrict each participant’s “annual additions” to the lesser of 100 percent of compensation or $56,000 (this is the limit for 2019; after 2019 this amount will be periodically adjusted by the IRS to reflect cost of living changes). The term “annual additions” includes all contributions by you and RIT to the Plan that may be allocated to your accounts other than certain “catch-up” contributions described below and rollover contributions.
Excluding certain “catch-up” contributions described below, your own pre-tax and Roth contributions to this Plan, and all other 403(b) plans, 401(k) plans, simplified employee pension or simple retirement plans, are limited to $19,000 per year (this is the limit for 2019; after 2019 this amount will be periodically adjusted by the IRS to reflect cost of living changes). Your rollover contributions to this Plan do not count towards this limit.
The amount of matching contributions and after-tax contributions made on behalf of highly compensated employees may be limited if the Plan does not pass certain IRS tests.
If during the year you participate in another 403(b) plan or control a business and participate in a defined contribution retirement plan through that business, the amounts contributed on your behalf under the Plan may have to be aggregated with contributions under the other plan(s) when applying the above IRS limits. Generally, you will be deemed to be in control of another business if you own, directly or indirectly, more than 50% of the other business. Please contact the Plan Administrator if these aggregation rules could apply to you so that appropriate actions can be taken to ensure that you do not run afoul of the IRS limits. There can be significant adverse tax consequences if you do not comply with these rules.
In some cases, you may be able to make additional catch-up contributions to the Plan. There are two types of catch-up contributions:
(a) Special Catch-Up Contributions. If you have 15 or more years of service with RIT, you may contribute on a salary reduction basis up to an additional $3,000 per calendar year provided that:
- the total extra contributions for all calendar years cannot exceed $15,000; and
- the total of your lifetime elective deferrals cannot exceed $5,000 times your years of service with RIT (e.g., if you have 20 years of service, when your total elective deferrals reach $100,000 ($5,000 x 20), you will not be permitted to make a 403(b) catch-up election).
Such extra contributions will not be taken into account for purposes of the limit on pre-tax or Roth contributions described above, i.e., the $19,000 limit in 2019.
(b) Age 50 Catch-Up Contributions. If you will be at least age 50 on the last day of the year and you are contributing the maximum employee contribution allowable, you may make additional, catch-up contributions of up to $6,000 in 2019 (as adjusted after 2019 by the IRS to reflect cost of living changes).
Age 50 Catch-up contributions are not subject to the annual additions limitations or the pretax/Roth contribution limitations. For example, in 2019, if you are, or will be, at least age 50, you are eligible to contribute $25,000 in pre-tax/Roth contributions ($19,000 basic limit and $6,000 in catch-up contributions).
In addition, if you are eligible for both the special catch-up election under subsection (a) above and the age 50 catch-up contribution under subsection (b) above, any extra contributions shall first be treated as a special catch-up election under subsection (a) to the extent permitted and then as an age 50 catch-up contribution under subsection (b).
If any of the contribution limits are exceeded, the Plan Administrator has the authority to take such corrective action he/she determines appropriate to comply with IRS rules.