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>> Took some time at lunch.... remember I'm just finding stuff, not claiming expertise in this area. Also remember the original thread was "if the law allows more than 15%, why does my employer limit me to 15%?". <<

I'm going to try to avoid legalese here and speak at a high level, partly because I don't know the exact details. :)

Basically, 401(k) plans have to prevent themselves from being "top heavy"; that is, they have to make sure that the vast majority of the contributions don't come from the highest-paid employees (especially those earning over $80,000).

As a result, some plans have some rules in place to make sure that's not a problem. Some of them limit people earning $80,000 or more to a lower percentage or an amount below $10,000 per year. Some of them just put a cap on it all so few people can contribute the maximum.

My current employer caps it at 15%, and matches dollar for dollar on at least the first $4,000 per year (it's $5,000 this year because the company is meeting financial performance targets). My last employer allowed up to 17% before tax and matched 50 cents on the dollar for the first 8%. There are a lot of different ways they adhere to the "highly compensated employee" rule, but usually strange limits and restrictions are related to it. The way my current employer does it, even the lower paid employees can get as much company match as the higher-paid employees, and that helps them follow the rules.

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