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I have never heard of another employee's contribution affecting what other may contribute... I have always contributed the max allowed by the IRS and have never had any returned. Is the 401k at the airlines somehow different than at other businesses?Andy Neill said:Falcon,
What Hoser is facing, however, is being restricted well below the $14,000 limit level because he is considered to be part of the "highly compensated employee" group (the lower limit of the group is somewhere in the $90,000-$100,000 range I believe). If the HCE's are socking away a significant amount more than the lowly compensated employees, then the excess is refunded to them as taxable income. At another operation, I have seen this cutoff somewhere in the $7000-$8000 range - well below the maximum. It seems the highly compensated employees would have an interest in encouraging their lower paid couterparts to increase the level of their own 401k participation to raise the average.