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Author: ahsu78 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75340  
Subject: Does your 403(b) plan have a percentage cap? Date: 1/13/2005 8:10 PM
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This is sort of an informal survey of people who participate in a 403(b) plan.

Does your plan place a percentage cap on your contribution in addition to the federal dollar limit? For example, my employer's plan limits my contribution to 12.5% of my annual salary OR $14,000, whichever is lower. It seems that this disadvantages lower-earners like myself, who's annual contribution is capped at no where near the $14,000 limit.

I have a friend who also participates in a 403(b) plan and he said his company recently changed their plan to remove the percentage cap. Is this a trend? I'm wondering if there's been a recent change in the law to allow for this percentage cap to be removed. Does anyone know what it is, or where I would find more to read about it? I want to learn more before bringing it up with my HR department. Unfortunately, the person in charge of my company's pension plan and 403(b) plan is not my ally. Don't want to start a war if there's no real basis for a policy change.

FYI, I'm coming from the perspective of being young (26), with relatively few expenses (no house or kids or loans to pay off), in a comfortable two-income household, who's already maxed out contributing to my 403(b) and Roth IRA, already DRIPing, but still has some extra income. I've been told to buy a house, but I'm not quite ready for that yet. Like anyone, I'm just looking to reduce my taxable income any way I can.

Thanks for anything you can contribute! If anyone knows, it'd be you fools.
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