Tech Talk: Employer Contributions to a Former Employee's 403(b)

Q. Can an employer contribute to a 403(b) plan for a former employee?

A. Yes, if the plan allows, an employer can make nonelective contributions to a former employee’s account for five years after the date of severance, up to the annual limits the IRS sets. However, no portion of these contributions can come from money otherwise payable to the former employee by the employer and must cease at the death of the former employee.