[tony]

http://www.marketwatch.com/story/contribut...drop-2009-08-27

[intruder]

http://www.marketwatch.com/story/contribut...drop-2009-08-27

I am somewhat mystified as to how this story has developed legs. IRC 402(g)(4) provides that the salary deferral amounts (currently16,500(22,000 if 50) shall be adjusted in accordance with the changes provided in IRC 415(d) for defined contribution (DC) plans.
IRC 415(d) provides that the DC limits shall be adjusted for increases in the COLA. There is no provision for adjustment in 415(d) or the regs to reduce the DC limit of 49k/54.5 or the elective deferral limit of 16,500/22,000 due to decreases in the cost of living for either DC plans or defined benefit plans for that matter.

[Vince]

http://www.marketwatch.com/story/contribut...drop-2009-08-27

I am somewhat mystified as to how this story has developed legs. IRC 402(g)(4) provides that the salary deferral amounts (currently16,500(22,000 if 50) shall be adjusted in accordance with the changes provided in IRC 415(d) for defined contribution (DC) plans.
IRC 415(d) provides that the DC limits shall be adjusted for increases in the COLA. There is no provision for adjustment in 415(d) or the regs to reduce the DC limit of 49k/54.5 or the elective deferral limit of 16,500/22,000 due to decreases in the cost of living for either DC plans or defined benefit plans for that matter.

That was my reaction as well. From my understanding of the code, I did not recall seeing anything that would allow for a reduction in the 415 limit. It was built pretty much as a ratcheting system, which could only tick upwards.

[sschullo]

http://www.marketwatch.com/story/contribut...drop-2009-08-27

I am somewhat mystified as to how this story has developed legs. IRC 402(g)(4) provides that the salary deferral amounts (currently16,500(22,000 if 50) shall be adjusted in accordance with the changes provided in IRC 415(d) for defined contribution (DC) plans.
IRC 415(d) provides that the DC limits shall be adjusted for increases in the COLA. There is no provision for adjustment in 415(d) or the regs to reduce the DC limit of 49k/54.5 or the elective deferral limit of 16,500/22,000 due to decreases in the cost of living for either DC plans or defined benefit plans for that matter.

That was my reaction as well. From my understanding of the code, I did not recall seeing anything that would allow for a reduction in the 415 limit. It was built pretty much as a ratcheting system, which could only tick upwards.

Both of you mystified! We educators have been mystified for decades.

[intruder]

http://www.marketwatch.com/story/contribut...drop-2009-08-27

I am somewhat mystified as to how this story has developed legs. IRC 402(g)(4) provides that the salary deferral amounts (currently16,500(22,000 if 50) shall be adjusted in accordance with the changes provided in IRC 415(d) for defined contribution (DC) plans.
IRC 415(d) provides that the DC limits shall be adjusted for increases in the COLA. There is no provision for adjustment in 415(d) or the regs to reduce the DC limit of 49k/54.5 or the elective deferral limit of 16,500/22,000 due to decreases in the cost of living for either DC plans or defined benefit plans for that matter.

That was my reaction as well. From my understanding of the code, I did not recall seeing anything that would allow for a reduction in the 415 limit. It was built pretty much as a ratcheting system, which could only tick upwards.

Both of you mystified! We educators have been mystified for decades.

Huh? I only said I was mystified as to how this urban legend got started, not what the answer is. It appears that people who are supposed to know better because they are experts who write these weekly updates on benefits topics dont check the facts or it this case the applicable law which has been around unchanged for 20 years. Maybe unlike Vince, they cant read the tax code. I guess the only way they can write a story about the lack of any cola increase next year is to write about the possibility of a decline in $ amounts. But then even editors of professional benefit journals have to pay the mortgage.

[sschullo]

But then even editors of professional benefit journals have to pay the mortgage.

no ethics anywhere in the 403b world...imagine that....the editors of PROFESSIONAL benefit journals giving out bad press.