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Benefits Plans - Retirement Savings Plans: 403(b) SRA and 457(b) Limits

IRS Contribution Limits for 2015

The Internal Revenue Service (IRS) has set the following limits for contributing to 403(b) and 457(b) plans for 2015. The limit on 403(b) and 457(b) elective deferrals are $18,000 for each plan, or $24,000 for each plan for employees age 50 and older. The table below references the Internal Revenue Code (IRC).

Use Self Service > Benefits to view your IRS Maximum Contribution Projections

If you wish to view your  SRA, and/or 457(b) plan IRS Maximum Contribution Projection, you may do so by logging on to Wolverine Access and using Self-Service > Benefits > Calculate Ret. Contribution.

 

IRC SECTION WHAT IT LIMITS UNDER THE U-M PLAN

402(g)

Eligible employees may make elective deferrals of up to $18,000 to a 403(b) plan for 2015. Two catch-ups are also available which may raise the limit if you qualify:

  • AGE 50 CATCH-UP: Employees turning 50 and older in 2015 may contribute an additional $6,000.
  • 15-YEAR CATCH-UP: Employees with 15 or more cumulative years of service at U-M, whose lifetime 403(b) contributions average less than $5,000 per year of service,  may be eligible for an increase of up to $3,000 per year, with a lifetime cap of up to $15,000. The average is recalculated at the end of each year; you may lose this catch-up if your increased contributions cause your average to go over $5,000.

Caps the amount you may contribute between your 403(b) Basic Plan, SRA, and Roth SRA contributions. The University match is a 401(a) plan so it does not count toward this limit. Pay special attention to this limit if you make contributions through another job in the same calendar year.

401(a)(17)

Caps eligible earnings at $265,000 for the purpose of providing contributions as a percent of salary ($392,833 for pre-1996 grandfathered participants).

If your 2015 salary exceeds this amount, Basic Plan contributions are suspended and resume in January 2016.

415(c)

Caps total contributions to a 403(b) defined contribution retirement plan to the lesser of 100% of an employee’s compensation or $53,000.

This limit may affect you if you participate in another retirement plan in addition to the U-M plan. For details see IRC 415(c) Limit.

457(b)

Employees may contribute up to $18,000 to a 457(b) plan entirely separate from the Basic and SRA plans. This plan also provides a $6,000 catch-up for employees turning 50 or older in 2015.

The limits on 457(b) and 403(b) contributions are entirely separate; you can max out both.

If You Reach These Limits

The IRS imposes penalties for exceeding these limits, so U-M Payroll/Benefits systems track your year-to-date contributions. If you reach the limit, any further contributions are suspended for the remainder of the year and resume in January. However, U-M cannot track any contributions you make through another employer’s retirement plan, so it is your own responsibility to account for contributions to the following plan types:

  • 403(b)
  • 401(k)
  • VA Healthcare System Thrift Savings Plan (TSP)
  • 408(k)(6) Salary Reduction Simplified Employee Pension Plans
  • SEP-IRA
  • SIMPLE (Savings Incentive Match Plans for Employees)

Many employees opt to spread their maximum contributions over the full year; there is a calculator online in Wolverine Access to help you determine how much to contribute per paycheck to your SRA, Roth SRA, 457(b), and/or Roth 457(b). Log in to Self Service > Benefits and select “Calculate Ret. Contribution”.

  1. Click “Recalc for Next Year/Current Date” to view projection "As of Date: 01/01/2015".
  2. You may view this panel at any time throughout the year. 
  3. The new rates for affected Hospitals and Health Centers employees will not be reflected in this calculator until 1/1/2015.

Use Self Service > Benefits to Make Changes Anytime

If you wish to make changes to your Basic, SRA, and/or 457(b) plans, you may do so by logging on to Wolverine Access and using Self Service > Benefits > Initiate Ret Savings Elections. You may change your contribution amount at any time throughout the year, limited to once per pay period.

Effective Date of Changes

Subject to deadlines, Basic/SRA elections are generally effective with your next available paycheck, which may be within the same month you are initiating the election. Elections for the 457(b) are always effective the month following that in which you initiate an election.

The effective date will appear after you select which plan type (Basic/SRA or 457(b)) you are changing, so you can review it before you actually initiate the election. Remember you may only make one change to each plan per pay period (457(b) once per month).

Once you submit any changes and finalize your contribution amount(s), you will receive an immediate confirmation of your election.  You are encouraged to print this confirmation for your records. If you do not receive a confirmation number via email immediately after completing the election process, you have not properly submitted and finalized the election.

How to Use Self Service > Benefits

Detailed IRS Max Limit Handbook

 

Next: Frequently Asked Questions

 

Limitations
The University of Michigan in its sole discretion may modify, amend, or terminate the benefits provided with respect to any individual receiving benefits, including active employees, retirees, and their dependents. Although the university has elected to provide these benefits this year, no individual has a vested right to any of the benefits provided. Nothing in these materials gives any individual the right to continued benefits beyond the time the university modifies, amends, or terminates the benefit. Anyone seeking or accepting any of the benefits provided will be deemed to have accepted the terms of the benefits programs and the university's right to modify, amend or terminate them.
Every effort has been made to ensure the accuracy of the benefits information in this site. However, if any provision on the benefits plans is unclear or ambiguous, the Benefits Office reserves the right to interpret the plan and resolve the problem. If any inconsistency exists between this site and the written plans or contracts, the actual provisions of each benefit plan will govern. The University of Michigan in its sole discretion may modify, amend, or terminate the benefits provided with respect to any individual receiving benefits, including active employees, retirees, and their dependents.