The Supplemental Contributions Program allows highly compensated employees to defer a portion of their earnings that cannot be deferred under standard retirement savings plans due to limitations imposed by federal law. This program provides a way for eligible employees to enhance their retirement savings through after-tax contributions, which can be made directly or through payroll deductions.
This term is commonly used in employment and tax law, particularly in relation to retirement planning and benefits. The Supplemental Contributions Program is relevant for employees who exceed certain income thresholds and want to maximize their retirement savings. Users may encounter this term when reviewing their employer's retirement plans or when seeking to understand their tax obligations. Legal templates, such as those offered by US Legal Forms, can assist users in navigating the necessary paperwork related to this program.
Here are a couple of examples of abatement:
For instance, an employee earning $150,000 a year may wish to contribute an additional $10,000 to their retirement savings through the Supplemental Contributions Program, as their income exceeds the limits set by standard retirement plans. This allows them to save more for retirement while managing their tax liabilities. (hypothetical example)
Cal Gov Code § 22970.55 outlines the procedures for the Supplemental Contributions Program in California. It specifies how employee contributions can be made and establishes the role of the governing board in setting contribution parameters.
| State | Key Differences |
|---|---|
| California | Follows Cal Gov Code § 22970.55, allowing after-tax contributions with specific procedures. |
| New York | Similar provisions exist but may have different contribution limits and tax implications. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Key Differences |
|---|---|---|
| Retirement Savings Plan | A plan that allows employees to save for retirement, often with tax advantages. | Typically has contribution limits based on income; does not allow after-tax contributions. |
| Deferred Compensation Plan | A plan that allows employees to defer part of their income to a later date. | Can include pre-tax and after-tax contributions; may have different tax implications. |
If you are a highly compensated employee considering the Supplemental Contributions Program, review your employer's retirement plan options. Determine your eligibility and contribution limits. You may want to consult with a financial advisor or legal professional to understand the implications fully. Additionally, you can explore US Legal Forms for templates that can help you manage the necessary documentation.
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Only highly compensated employees are eligible to participate in this program.