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Author: 3muttsmom Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76883  
Subject: Re: Does your 403(b) plan have a percentage cap? Date: 1/16/2005 4:17 PM
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By the way, one of my colleagues who used to do pension management for companies said the reason they had the limit here is because the total that a company can claim as expenses for tax purposes is 25%, so the 15% limit I'm allowed plus the 5% they match plus the 5%+ they put in our cash balance plan would be the max for expenses the company can claim for its taxes.

Apparently, to offset raising my allowed contribution rate, they've capped the cash balance plan contributions at 5%, whereas they used to step up to 8% based on years employed plus age of employee.

I have no idea why an organization that has a 403(b) would have limits, since as I understand it, these organizations are not for profits, anyway. Hence, no tax effect.

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