MMC Benefits Handbook
The IRS imposes several limits on tax-qualified plans, such as establishing a maximum amount of compensation on which your contributions can be based. This limit is $285,000 for the Plan year beginning January 1, 2020. It may increase in the future if the IRS announces cost-of-living adjustments.
The IRS-imposed dollar limit on the amount of before-tax and/or Roth 401(k) contributions you can make during any calendar year is $19,500 for 2020 (plus $6,500 catch-up and/or Roth catch-up contribution for a $26,000 total if you will be age 50 or older by the end of the calendar year). This amount may increase in future years. This limit applies to all plans to which you make before-tax and/or Roth 401(k) contributions in the same calendar year, including 401(k) and 403(b) tax deferred annuity plans of other employers (but not including section 457(b) retirement plans).
If you have made before-tax and/or Roth 401(k) contributions to any other plans (such as your former employer's tax-qualified plan) in the same calendar year, you should adjust your before-tax and/or Roth 401(k) contribution election rate to the MMA 401(k) Savings & Investment Plan so you do not exceed the annual IRS limit. Note that you may elect to increase your before-tax and/or Roth 401(k) contribution to the MMA 401(k) Savings & Investment Plan effective the start of the following calendar year, in order to make the maximum annual contributions that year.
If you determine that your before-tax and/or Roth 401(k) contributions to the MMA 401(k) Savings & Investment Plan during a calendar year, when added to your before-tax and/or Roth 401(k) contributions to other plans during the same year, exceed the annual IRS limit, you should inform the Global Benefits Department in writing no later than March 1 the following year. Along with your written notice, a copy of Form W-2 issued by your previous employer is required. Upon receipt of written notice and Form W-2 prior to March 1, the excess contributions (and earnings) will be distributed to you before April 15 (which will result in the forfeiture of any corresponding Company matching contributions). If Global Benefits has not received written notification by March 1, the excess contributions will be held by the Plan until you are eligible for a withdrawal or distribution. You will owe tax on this amount in the year in which the excess contribution was made and you will be taxed again on this same amount at the time it is distributed from the Plan.
There is a separate IRS limit on total combined employer and employee contributions that can be made to the Plan and any other defined contribution plans of the Marsh & McLennan Companies controlled group (Marsh & McLennan Companies and their subsidiaries). Under the limit, the total combined employer and employee contributions made on your behalf in the aggregate cannot exceed the lesser of 100% of your compensation or $57,000 for 2020. If you are age 50 or older by the end of 2020, the total combined contribution limit is increased to $63,500 (to include catch-up or Roth catch-up contributions).
Amounts considered for purposes of this limit include before-tax contributions, Roth 401(k) contributions, after-tax contributions, and Company matching contributions (as well as any MMC fixed company contributions received under the Marsh & McLennan Companies 401(k) Savings and Investment Plan prior to a participant's transfer to MMA). Rollover Contributions and loan repayments are not included in this limit.
For purposes of this limit, compensation is defined as your annual compensation including any before-tax and/or Roth 401(k) contributions you make to benefit plans such as the Plan, Flexible Spending Account, medical coverage, dental coverage, Voluntary AD&D Insurance, or the Transportation Reimbursement Incentive Program (TRIP). The limit may be increased in future years if the IRS announces cost-of-living adjustments.
In addition, the IRS requires that employee and Company contributions to the Plan meet certain non-discrimination tests. Failure to meet such tests may result in the contributions of higher-paid participants (and Company matching contributions) being further limited, reduced or forfeited.