For what it’s worth, I’m now quite convinced that Tom Geer nailed it in comment #6.

As is usual when dealing with Uncle Sam, there is no clear right or wrong… just generally accepted. Of course, with our income tax system it is all correct until you get audited. My advise, pay a CPA to do your taxes so they sign your tax return too!

Art Dinkin, CFP

1-457 is more or less off on its own, so the $15,500 into that is fine.

2-The deferral limits for qualified plans and 403(b) are per employer AND per employee. You get one bite out of that apple per year, another $15,500.

3-The aggregate limits are per employer, which sounds like a good thing. But there is a special rule that says your 403(b)’s employer is any business of which you have more than 50% control (415(k)(4)). That provision also clearly lumps your SEP-IRA with the 403(b). So you only get one aggregate limitation because both plans are deemed maintained by the same employer. Theoretically, different compensation definitions could vary the results around the margins, but only where the limitation is the percentage and not the dollar amount. The aggregate limit limits deferrals, as well.

4-If there really was a one-time irrevocable election, those amounts are treated as employer contributions for all purposes.

5-I get to a total of $45,000 (403(b) AND SEP all in) plus $15,500 (457).

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415(g) Aggregation of plans
Except as provided in subsection (f)(3), the Secretary, in applying the provisions of this section to benefits or contributions under more than one plan maintained by the same employer, and to any trusts, contracts, accounts, or bonds referred to in subsection (a)(2), with respect to which the participant has the control required under section 414(b) or (c), as modified by subsection (h), shall, under regulations prescribed by the Secretary, disqualify one or more trusts, plans, contracts, accounts, or bonds, or any combination thereof until such benefits or contributions do not exceed the limitations contained in this section. In addition to taking into account such other factors as may be necessary to carry out the purposes of subsection (f), the regulations prescribed under this paragraph shall provide that no plan which has been terminated shall be disqualified until all other trusts, plans, contracts, accounts, or bonds have been disqualified.
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It seems fairly clear from the emphasized portion that contributions are aggregated on a per employer basis when determining whether or not contributions exceed the limits outline in that section (i.e., Section 415).

As for the reference to subsection (f)(3), that applies to “multiemployer” plans, which I don’t have (this is different from multiple plans from different employers).

l employer contributions;

l a specified portion of employee contributions, taken into account without regard to any rollover contributions or employee contributions to a supplemental executive plan that are excludable from gross income under a salary or deferred arrangement; and

l forfeitures.13

Per 26(reference item) Reg. §1.415-1(c)-1(b)(6)(ii)(C), as added by T.D. 9319 (April 4, 2007).

27 (reference item)Reg. §1.415-1(c)-1(b)(6)(ii)(D), as added by T.D. 9319 (April 4, 2007).

Amounts contributed to a simplified employee pension are treated as allocated to the individual’s account as of the last day of the limitation year ending with or within the taxable year for which the contribution is made. (see 26 reference item above) If, in a particular limitation year, an employer contributes an amount to an employee’s account with respect to a prior limitation year and such contribution is required by reason of such employee’s rights resulting from qualified military service, such contribution is not considered an annual addition with respect to the employee for that particular limitation year in which the contribution is made, but is considered an annual addition for the limitation year to which the contribution relates.( see 27 reference item above)

Notice that the SEP is included as an annual addition. And the annual additions are made up of employee contributions and/plus employer contributions. Therefore you are contributing $31k as an ee and your contibution as an employer to your SEP means you can only put $14 into the SEP to not go over the $45k limit for 2007.

Good question. I think your argument about the annual addition is “per – employer” is an incorrect reading of the code.

excerpt from ref 26 above follows:

Section 415 was added to the Code by the Employee Retirement Income Security Act of 1974 (88 Stat. 829), Public Law 93-406 (ERISA), and has been amended many times since. Section 415 provides a series of limits on benefits under qualified defined benefit plans and on contributions and other additions under qualified defined contribution plans. See also section 401(a)(16). Pursuant to section 415(a)(2), the limitations of section 415 also apply to section 403(b) annuity contracts and to simplified employee pensions described in section 408(k) (SEPs). In addition, the limitations of section 415 for defined contribution plans apply to contributions allocated to any individual medical account that is part of a pension or annuity plan established pursuant to section 401(h) and to amounts attributable to medical benefits allocated to an account under a welfare benefit fund established for a key employee pursuant to section 419A(d)(1).

My two cents – no matter how many employers or plans available to you – your limited to $45k for 2007.

In my experience, in general, the IRS chooses the most conservative/restrictive limitation. So I would similarly assume that (although compulsory) the 5% mandated contribution is considered elective (regardless of the dictionary-definition of ‘elective’).

I’ll try to hit IRS.gov this afternoon…

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Exceeding the 415 Limit
IRC section 415 specifies the maximum contribution — employee plus employer as well as before-tax and after-tax — that can be made to a retirement plan in a calendar year currently is $45,000 or 100 percent of taxable compensation, whichever is less. Like the 402(g) limit, the $45,000 amount is indexed to the cost of living.

You may have some clients who are contributing more than the maximum allowable under section 415, especially if their employer operates both a qualified basic retirement plan for employer contributions and a 403(b) supplemental plan for employee contributions. When someone participates in both a 401(k) plan and a 403(b) plan, for example, contributions to each plan are generally not added together to calculate an employee’s 415 limit*. An employee can seemingly exceed the 415 limit because it is applied on a per-employer basis. This is true regardless of the number of plans an employee participates in during the year or how many plans an employer operates. (Source) (Bold emphasis added by me)
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While it’s primarily written in the context of 403(b) contributions, it seems more or less parallel to my situation. Like I said, this makes it sound pretty clear, but TIAA-CREF isn’t the one in charge of officially interpreting the IRC.

I can’t believe this issue is so difficult to nail down; I’ve looked and looked and can’t find a straight answer.

The best source I contacted was a senior partner at my firm, who indicated that your limits were as you mentioned; $15,500 for 403b and 457, as well as $45,000 for the SEP, for a whopping total of $76,000.

However, that still seems to good to be true, and I’m inclined to think that the $44,000 limit is a per-employee limit for the sum total of elective deferrals and employer contributions (which are what the SEP-IRA consists of).