What are the main sources of employee contributions to qualified retirement plans? - AN-
SWER Elective deferrals, after-tax contributions, rollovers, and Pension-Linked Emergency
Savings Accounts (PLESA).
Which plans allow pre-tax elective deferrals? - ANSWER 401(k), Starter(k), SIMPLE 401(k),
403(b), SARSEP, SIMPLE IRA, and 457 plans.
What are pre-tax elective deferrals? - ANSWER Contributions made by the employer at
the employee's election, excludable from gross income.
What IRC section limits pre-tax elective deferrals for a calendar year? - ANSWER IRC
§402(g).
Are pre-tax elective deferrals treated as basis for tax purposes? - ANSWER No, they are
not treated as basis since they are not taxed when contributed.
What test applies to pre-tax elective deferrals for nondiscrimination? - ANSWER Actual
Deferral Percentage (ADP) test under IRC §401(k).
What are designated Roth contributions? - ANSWER After-tax elective deferrals with po-
tentially tax-free distributions if conditions are met.
How are Roth contributions taxed when distributed? - ANSWER Contributions are tax-
free; earnings may be tax-free if conditions are met.
What IRC section allows catch-up contributions? - ANSWER IRC §414(v).
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, Who is eligible for catch-up contributions? - ANSWER Participants age 50 or older by the
end of the calendar year.
Which plans can include catch-up contributions? - ANSWER 401(k), SIMPLE 401(k),
403(b), SARSEP, SIMPLE IRA, and 457 plans.
What are pre-tax catch-up contributions? - ANSWER Catch-up contributions made as pre-
tax elective deferrals.
What change to catch-up contributions takes effect in 2026? - ANSWER Participants earn-
ing over $145,000 must make catch-up contributions as Roth.
What is the increased catch-up limit for participants aged 60-63 in 2025? - ANSWER
Greater of $10,000 or 150% of the regular catch-up limit.
If the regular catch-up limit is $7 - ANSWER 500, what is the limit for ages 60-63?,
$11,250 (150% of $7,500).
What must a 401(k) plan allow to be considered a 401(k) plan? - ANSWER Pre-tax elective
deferrals.
Can a 401(k) plan allow only designated Roth contributions? - ANSWER No, it must allow
pre-tax elective deferrals.
What types of contributions can a 401(k) plan combine? - ANSWER Pre-tax, Roth, match-
ing, and nonelective contributions.
How does a salary reduction agreement work? - ANSWER Employee elects to defer a per-
centage of compensation to the plan.
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SWER Elective deferrals, after-tax contributions, rollovers, and Pension-Linked Emergency
Savings Accounts (PLESA).
Which plans allow pre-tax elective deferrals? - ANSWER 401(k), Starter(k), SIMPLE 401(k),
403(b), SARSEP, SIMPLE IRA, and 457 plans.
What are pre-tax elective deferrals? - ANSWER Contributions made by the employer at
the employee's election, excludable from gross income.
What IRC section limits pre-tax elective deferrals for a calendar year? - ANSWER IRC
§402(g).
Are pre-tax elective deferrals treated as basis for tax purposes? - ANSWER No, they are
not treated as basis since they are not taxed when contributed.
What test applies to pre-tax elective deferrals for nondiscrimination? - ANSWER Actual
Deferral Percentage (ADP) test under IRC §401(k).
What are designated Roth contributions? - ANSWER After-tax elective deferrals with po-
tentially tax-free distributions if conditions are met.
How are Roth contributions taxed when distributed? - ANSWER Contributions are tax-
free; earnings may be tax-free if conditions are met.
What IRC section allows catch-up contributions? - ANSWER IRC §414(v).
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, Who is eligible for catch-up contributions? - ANSWER Participants age 50 or older by the
end of the calendar year.
Which plans can include catch-up contributions? - ANSWER 401(k), SIMPLE 401(k),
403(b), SARSEP, SIMPLE IRA, and 457 plans.
What are pre-tax catch-up contributions? - ANSWER Catch-up contributions made as pre-
tax elective deferrals.
What change to catch-up contributions takes effect in 2026? - ANSWER Participants earn-
ing over $145,000 must make catch-up contributions as Roth.
What is the increased catch-up limit for participants aged 60-63 in 2025? - ANSWER
Greater of $10,000 or 150% of the regular catch-up limit.
If the regular catch-up limit is $7 - ANSWER 500, what is the limit for ages 60-63?,
$11,250 (150% of $7,500).
What must a 401(k) plan allow to be considered a 401(k) plan? - ANSWER Pre-tax elective
deferrals.
Can a 401(k) plan allow only designated Roth contributions? - ANSWER No, it must allow
pre-tax elective deferrals.
What types of contributions can a 401(k) plan combine? - ANSWER Pre-tax, Roth, match-
ing, and nonelective contributions.
How does a salary reduction agreement work? - ANSWER Employee elects to defer a per-
centage of compensation to the plan.
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