Called a catch-up contribution, employees age 50 or older may be able to contribute an extra $6,000 to their 403(b) account, with a maximum of $24,000 for 2018. A lesser known provision is that employees who have been with the same eligible employer for 15 years may be able to further increase their limit on deferrals into their 403(b) account by up to $3,000 in any taxable year (lifetime employer-by-employer limit of $15,000). This additional catch-up contribution is referred to as the “15-year rule” and employees do not need to be 50 years old to qualify. However, if they are 50 or older, they can make both types of catch-up contributions in the same year.

In order to qualify, an employer must include the provision in their plan and be one of the following:

  • Public school system
  • Hospital
  • Home health service agency
  • Health and welfare service agency
  • Church, or
  • Convention or association of churches

Utilizing the 15-year rule is a great way to help employees maximize their saving potential. If you are interested in additional information or wonder if this provision is already in your plan, please reach out to your Nyhart Consultant.