Business Banking - Retirement Services
|What it is:||A retirement plan that accepts contributions from employees of nonprofit or educational organizations. Traditional, tax-deferred 403(b) contributions are made before income taxes are applied, and earnings and contributions are not taxable until withdrawn. Roth 403(b) contributions are made with after-tax dollars, but withdrawals, including earnings, are tax-free if certain conditions are met. Contributions can only be invested in mutual funds or annuities.|
|Maximum total plan contribution that the employer may deduct||N/A - Tax deduction is not an issue for tax-exempt organizations.|
|Maximum annual allocation to participant’s account||100% of participant’s total pay or $49,000,1 whichever is less|
|Maximum annual participant deferral (cannot exceed 100% of pay)||Up to $16,500;2 catch-up contribution of $5,500 if age 50 or older. Annual participant deferral can be before-tax, Roth after-tax or both, depending on plan terms.|
|Required employer contribution||For government plans, as may be mandated by state/local statute.
For plans subject to ACP testing, if traditional safe harbor is set up, then one of the following:
1 The DC annual additions limit is effective for limitation years ending in the calendar year. The dollar limit is increased by the amount of the applicable catch-up contribution.
2 Salary deferrals into other qualified retirement plans count toward the $16,500 personal annual maximum contribution amount.
3 Basic match: 100% of participant contributions up to 3% of pay, plus 50% of participant contributions up to the next 2% of pay.
4 Enhanced match: 100% of participant contributions, but not less than 4% of pay or more than 6%; or A% of participant contributions up to the first B% of pay, plus C% of participant contributions up to the next D% of pay (C% may not be greater than A% and the sum of B% plus D% may not be greater than 6%).
5 Nonelective contribution: 3% of pay for all eligible employees, including those who do not contribute.
Investment products are not deposits or obligations of, or guaranteed by Lake City Bank or any other bank, are not insured or guaranteed by the FDIC or any governmental agency and are subject to investment risks, including possible loss of principal invested. Past performance is not a guarantee of future results.