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phantomdiver writes (in part):

From what I understand, Uncle Sam sets the dollar limits and different companies may set percentage limits as they like.

I reply:

That's not completely accurate, for two reasons. One, I'm pretty sure that there's a ceiling on the percentage of income you are permitted to defer. It may be that the company can permit a bigger percentage, but ensuring that you do not make "excess contributions" is your responsibility.

Two, the company must ensure that its plan does not fail the "non-discrimination test" set forth in one of the IRS Publications. I'm working from memory here, but I believe it compares the average deferral percentage among "highly compensated employees" to the average deferral percentage among all employees, and the first number can't exceed the second number by more than 2%. If it does, the company will have to return enough contributions to "highly compensated employees" to permit the plan to pass the test. --Bob
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