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Comparison of Employee Contribution Plans
401(k) |
403(b) |
457 |
Thrift |
|
ELIGIBLE TO ESTABLISH: |
All employers with non-highly compensated employees, EXCEPT governmental. |
501(c)(3) organizations – public education institutions, churches, hospitals, charitable societies and certain other tax-exempt organizations. |
Any employer who is a state or local government and some tax exempt employers. |
All employers with non-highly compensated employees. |
EMPLOYEE SALARY REDUCTION CONTRIBUTIONS: |
Lesser of 100% of income or $15,500 for 2008 plus a $5,000 catchup contribution for participants 50 or older.. |
Same as 401(k) |
Same as 401(k) |
Limited to 100% of taxable income. |
EMPLOYER CONTRIBUTIONS: |
Limited to 25% of total compensation (excluding deferrals) |
Limited to 25% of total compensation applicable to profit sharing plans (excluding deferrals) |
Limited to 25% of total compensation. |
Limited to 25% of total compensation. |
SALARY REDUCTION ELECTION: |
May change as often as desired. |
May change as often as desired. |
May change each month. |
May change as often as desired. |
PLANS WITH ELECTIVE DEFERRALS ONLY: |
Must meet all discrimination tests.401(k) |
Can avoid discrimination tests if all employees eligible except part-time employees and certain students. |
Subject to 457 regulations. |
Must meet 401(m) non-discrimination test ONLY. |
NON-DISCRIMINATION RULES: |
Plans must comply with the general non-discrimination rules of 401(a)(4), permitted disparity rules of 401(a)(5), minimum participation of 401(a)(26), coverage requirements of 410(b), maximum compensation of 401(a)(17) and maximum contributions and benefits of 401(m) and ADP test. |
Plans with non-elective employer contributions must comply with general non-discrimination rules, permitted disparity rules, minimum participation requirements, coverage requirements, and non-discrimination requirements relating to contributions, benefits and compensation. Matching employer contributions must pass 401(m) test. Not subject to top-heavy rules. |
Employer and employee contributions may not exceed the lesser of $46,000 or 100% of covered compensation. |
Plans must comply with the general non-discrimination rules of 401(a)(4), permitted disparity rules of 401(a)(5), minimum participation of 401(a)(26), coverage requirements of 410(b), maximum compensation of 401(a)(17) and maximum contributions and benefits of 401(m). |
DISTRIBUTIONS: |
May be rolled into an IRA or another qualified plan. |
May roll into an IRA or other qualified plans. |
Same as 401(k) |
May be rolled into an IRA or another qualified plan. |
ROLLOVERS: |
May accept rollovers from any other qualified plan. |
Same as 401(k) |
Same as 401(k) |
Same as 401(k) |