New Jersey Administrative Code › Title 17 - TREASURY - GENERAL › Chapter 7 - ALTERNATE BENEFIT PROGRAM › Subchapter 12 - NEW JERSEY ADDITIONAL CONTRIBUTIONS TAX-SHELTERED PROGRAM (ACTS) › Section 17:7-12.10 - Limitations on annual additions

Current through Register Vol. 56, No. 14, July 15, 2024
(a) A
				participant cannot receive an allocation for a limitation year greater than the
				maximum annual addition as set forth in this section.
(b) If annual additions are credited to a
				participant under any IRC § 403(b) plans of the employer in addition to
				ACTS for a limitation year, the sum of the participant's annual additions for
				the limitation year under the ACTS, and such other IRC § 403(b) plans may
				not exceed the maximum annual addition as set forth in this section.
(c) If a participant is in control of any
				employer for a limitation year, the sum of the participant's annual additions
				for the limitation year under the ACTS, any other IRC § 403(b) plans of
				the employer, any defined contribution plans maintained by controlled
				employers, and any section 403(b) plans of any other employers may not exceed
				the maximum annual addition as set forth in this section. For purposes of this
				subsection, a participant is in the control of an employer as set forth in IRC
				§§ 414(b) and (c) and 415(h); and a defined contribution plan means a
				defined contribution plan that is qualified under IRC § 401(a) or 403(a),
				an IRC § 403(b) plan, or a simplified employee pension within the meaning
				of IRC § 408(k). The Plan Administrator will provide written or electronic
				notice to participants that explains the limitation in this subsection in a
				manner calculated to be understood by the average participant and informs
				participants of their responsibility to provide information to the Plan
				Administrator that is necessary to satisfy this subsection. The notice will
				advise participants that the application of the limitations in this subsection
				will take into account information supplied by the participant and that failure
				to provide necessary and correct information to the Plan Administrator could
				result in adverse tax consequences to the participant, including the inability
				to exclude contributions to the ACTS under IRC § 403(b). The notice will
				be provided annually, beginning no later than the year in which the employee
				becomes a participant.
(d) The
				annual additions that may be credited to a participant under the ACTS for any
				limitation year will not exceed the maximum annual addition under this section,
				reduced by the annual additions credited to the participant under any other IRC
				§ 403(b) Prototype Plans of the employer in addition to the ACTS and, if
				the participant is in control of an employer, any defined contribution plans
				maintained by controlled employers and IRC § 403(b) plans of any other
				employers. Contributions to the participant's accounts under the ACTS will be
				reduced to the extent necessary to prevent this limitation from being
				exceeded.
(e) If, notwithstanding
				(a), (b), (c), and (d) above, a participant's annual additions under the ACTS,
				or under the ACTS and plans aggregated with the ACTS under (a) and (b) above,
				result in an excess annual addition for a limitation year:
1. The excess annual addition will be deemed
				to consist of the annual additions last credited, except annual additions to a
				defined contribution plan qualified under IRC § 401 (a) or a simplified
				employee pension maintained by an employer controlled by the participant will
				be deemed to have been credited first;
2. If an excess annual addition is credited
				to a participant under the ACTS and another IRC § 403(b) plan of the
				employer on the same date, the excess annual addition attributable to the ACTS
				will be the product of:
i. The total excess
				annual addition credited as of such date; times
ii. The ratio of the annual additions
				credited to the participant for the limitation year as of such date under the
				ACTS to the total annual additions credited to the participant for the
				limitation year as of such date under this and all other IRC § 403(b)
				plans of the employer; and
3. Any excess annual addition attributable to
				the ACTS will be corrected in the manner described in (g) below.