Author Topic: 403b Questions regarding Contract Term  (Read 1160 times)

9ft5wt

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403b Questions regarding Contract Term
« on: September 04, 2015, 03:17:37 PM »
Greetings,

I am just about to begin a job that offers a 403b. This is the first time I've had access to any tax-advantaged account so I want to make sure I do this right while the opportunity presents itself.

My contract extends from Sept 1, 2015 to July 31, 2016. My employer is offering me an 8% match on an $85,000 salary.

403b contributions must be deposited by the end of Dec.

I believe I am correct in that it would be in my great advantage to defer $18k into my new 403b before the Dec 2015 deadline, and then defer an additional $18k into the account before my contract expires during 2016. Please enlighten me if I am dead wrong about that.

My main question is in regards to the 8% match. Is my employer obligated to match 8% per fiscal year or per contract term? In other words, can I sneakily get an extra $6800 from them for fy 2015 and then again in fy 2016?

Thanks!

MDM

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Re: 403b Questions regarding Contract Term
« Reply #1 on: September 04, 2015, 04:14:46 PM »
I believe I am correct in that it would be in my great advantage to defer $18k into my new 403b before the Dec 2015 deadline, and then defer an additional $18k into the account before my contract expires during 2016.
Perfectly stated - not bad for a first-timer. ;)

Quote
My main question is in regards to the 8% match. Is my employer obligated to match 8% per fiscal year or per contract term? In other words, can I sneakily get an extra $6800 from them for fy 2015 and then again in fy 2016?
Your employer is obligated to do only what is in your contract, so you'll have to check the fine print.  Also check if your employer does a "true up".  See http://www.plansponsor.com/blines_Ask_the_Experts_Match_Maximization_Problem.aspx and http://www.cobb-retirement.com/articles/148-this-much-is-true-up.html, etc. for more on that.