Determining eligibility for the 403(b) 15-year catch-up election is a common source of administrative confusion, primarily because it deviates from standard retirement plan metrics. In the Ask the Expert series with PLANSPONSOR, senior counsel Kimberly Boberg, principal Kelly Geloneck, associate Emily Gerard, and principal David Levine, highlight that this catch-up does not utilize “elapsed time” or “hours-counting” methods. Instead, regulations mandate a specialized approach that requires precise tracking of service years to ensure participants meet the 15-year threshold with a qualified organization.
The complexity lies in the definition of a “year of service,” which must be measured against an employer’s specific work period—such as an academic year—rather than a standard calendar year. This requires plan sponsors to credit full-time employees for a full year while calculating fractional credits for part-time or partial-year staff. Because these nuances can lead to significant elective deferral errors, professional analysis is essential for maintaining plan compliance.
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