How lifetime and special catch-up contributions work

If you’re age 50 or older, the IRS has a gift for you. You may already know that the IRS lets you make pretax “catch-up” contributions to your UC 403(b) and 457(b) accounts. But you might not be aware that UC's 403(b) and 457(b) Plans have “lifetime” and “special” catch-up provisions that may let you contribute even more. Here’s how they work.

403(b) Plan: Lifetime Catch-Up Contributions

If you’re not age 50 but have at least 15 years of service with UC, you may be able make pretax catch-up contributions under the 403(b) Plan’s “lifetime” catch-up contributions feature. To qualify, your regular 403(b) Plan contributions over time can total no more than $5,000 multiplied by your years of UC service.

If you do qualify, this provision lets you contribute up to $3,000 per year in lifetime catch-up contributions, up to a lifetime maximum of $15,000.

Beginning the year you reach age 50, you can make regular pretax contributions and regular catch-up contributions as well as lifetime catch-up contributions, up to the IRS limits.

For details and assistance, call a representative at 1-866-682-7787.

457(b) Plan: Special Catch-Up Contributions

If you’re nearing retirement, the 457(b) Plan lets you put away additional money during your last three years at UC.

The limit on these “special" pretax catch-up contributions is a multiple of the current regular pretax contribution limit. Two formulas are used to calculate your limit—you will use whichever formula generates the smaller amount:

  • Formula 1: Multiply the current year’s regular pretax contribution limit by two. This formula gives you the special catch-up contribution limit. For 2023, your special catch-up contribution limit would be $45,000 ($22,500 x 2).
  • Formula 2: Take the current year’s regular pretax limit and add your “unused contribution capacity”—that is, last year’s regular pretax limit minus the amount you actually contributed in previous years. For example, say you contributed $12,000 last year. Subtract that from the 2023 limit of $22,500 to get $10,500. Add that to the $22,500 limit and your special catch-up contribution limit for 2023 is $33,000.

Since Formula 2 generates a smaller amount than the $45,000 limit from Formula 1, your limit for 2022 will be $33,000.

Note that additional limitations may apply to subsequent years of special catch-up contributions, so call a representative at 1-866-682-7787 for details and assistance.