Aggregation and 403(b) Plans

Q. What does the IRS have to say about aggregation and 403(b) plans?

A. Generally, 403(b) participants are each considered to have exclusive control over their own annuity contract. Because the participant is considered to control and maintain the annuity contract, contributions to the 403(b) annuity contract are generally not aggregated with contributions to any other defined contribution plan qualified under Code Section 401(a).

An exception, however, is that a participant’s 403(b) annuity contract will be aggregated with one or more DC plans when that particular participant is deemed to control the employer sponsoring the DC plan qualified under Section 401(a). 

If a 403(b) annuity contract is aggregated with a DC plan qualified under Section 401 (the sponsor of which is controlled by the 403(b) annuity holder), then both plans must satisfy the Section 415(c) limitation separately and also on an aggregate basis.