Originally Posted by
kronan
No, that's NOT what it means. There are 2 Caps associated with DC limits.
One is the Salary Cap, currently at 275k. Once you hit that Salary Cap, the 8% (9%) Contribution from the Company Stops...and, as TonyC said, your contribution rate for the rest of the year is 0%. So, effectively, for a WB Capt---your actual B fund Contribution is say in the 5% range of your annual compensation.
The Other DC limit is the Combined Contributions that you can defer, this year pretty sure it's 55k. That amount is the Company's B fund Contributions, 401 Contributions, and potential After tax contributions.
(A big After Tax contribution early in the year can impact on the "free" money from the Company and that is why Our Union recommends a max of a 5% After Tax contribution. Personally, I suggest starting with something like 3% and then ramping it up after the B fund contributions limit is hit)
You do realize that you just agreed with what Blob and I are saying, that currently the company only contributes a maximum of $22500 towards the IRS contribution limit. Also, that raising the B fund contribution to say 20%, as Blob suggested, results in the company putting in the maximum contribution of $55,000 while the pilot got to keep their 401k contribution and after tax contribution to invest elsewhere or to spend as they like.
An increase in the B fund will result in more free money for everyone, unless you don't know the rules and put to much of your own money in the DC plan. Of course, I wouldn't turn down cash over cap either.
Enough of this tangent though, why won't the union tell us how much more increasing the A plan would be than the currently proposed VB plan?