Elective Deferrals - Contribution Limitation Clause Samples
The 'Elective Deferrals - Contribution Limitation' clause sets a maximum limit on the amount an employee can choose to defer from their salary into a retirement plan, such as a 401(k), within a given year. This clause typically references annual limits established by law or plan rules, and may require the plan administrator to monitor contributions to ensure compliance. Its core function is to ensure that employee contributions do not exceed legal or plan-imposed thresholds, thereby maintaining the plan’s tax-qualified status and protecting both the employer and employees from potential tax penalties.
Elective Deferrals - Contribution Limitation. No participant shall be permitted to have elective deferrals made under this plan, or any other qualified plan maintained by the employer during any taxable year, in excess of the dollar limitation contained in Section 402(g) of the Code in effect for such taxable year, except to the extent permitted under Article VI of this amendment and Section 414(v) of the Code, if applicable.