Carol V. Calhoun, Counsel
Venable LLP
600 Massachusetts Avenue, NW
Washington, DC 20001
Phone: (202) 344-4715
Fax: (202) 344-8300
Mobile: (202) 441-5592
E-mail: Click here to send e-mail.
Venable LLP
600 Massachusetts Avenue, NW
Washington, DC 20001
Phone: (202) 344-4715
Fax: (202) 344-8300
Mobile: (202) 441-5592
E-mail: Click here to send e-mail.

- New Retirement Plan Limits
401(a) Plans- All
401(a) Plans- Compensation taken into account for non-grandfathered retirees increases from $170,000 to $200,000 per year.
- Defined benefit plans
- Dollar limit increases from $140,000 to $160,000 for non-grandfathered retirees.
- Actuarial adjustments for early and late retirement more generous for non-safety employees.
- Defined contribution plans
- Dollar limit on annual additions rises from $35,000 to $40,000 for 2002, then by $1,000 increments until 2006.
- Percentage limit on annual additions rises from 25% to 100%.
- Grandfathered
401(k) Plans- Deferrals rise from $10,500 to $11,000, effective 1/1/2002.
401(k)/403(b) plan deferrals need no longer be coordinated with457(b) deferrals.
403(b) Plans- Exclusion allowance eliminated.
- Limits on elective contributions become identical to those for
401(k) plans (see above). - Annual additions limit changes same as for
401(a) plans. - Coordination between elective contribution limits for
401(k)/403(b) plans and those for457(b) Plans eliminated. - Catch-up limits modified.
457(b) Plans- Limits on elective contributions become identical to those for
401(k) and403(b) plans (see above). - Coordination between elective contribution limits for
401(k)/403(b) plans and those for457(b) Plans eliminated. - Catch-up limits modified.
- Limits on elective contributions become identical to those for
- Other Changes
- User fees eliminated for determination letter requests for new (less than 5 years old)
401(a) plans for small (less than 100 employees) employers. - Requirement of one-time election on timing of distributions from
457(b) plans is eliminated. - Rollovers of distributions will be permitted among
401(a) plans,403(b) plans,457(b) plans, and IRAs, if the receiving plan permits such rollovers. - Money from a
403(b) or457(b) plan can be used to purchase service credit in401(a) defined benefit plan, even at a time when a distribution is not otherwise allowed, if both the transferring and receiving plan permit such transfers. - Safe-harbor for hardship distributions (during which new contributions cannot be made) reduced from 1 year to 6 months.
- Domestic relations order rules for
457(b) plans coordinated with current rules for qualified plans.
- User fees eliminated for determination letter requests for new (less than 5 years old)