A 401(a) is the government-sector and nonprofit counterpart to the private-sector 401(k). Both are defined-contribution retirement plans and both land in Section 401 of the Internal Revenue Code, but they diverge in who offers them, who can participate, and how contributions are structured. For HR teams at state and municipal agencies, public universities, and certain nonprofits, the 401(a) is often the default plan for covered employees, sometimes paired with a 403(b) or 457(b) for additional voluntary deferrals.
Who Can Offer and Participate in a 401(a) Plan 401(a) plans are limited to specific employer types: federal, state, and local government agencies, public educational institutions, and certain tax-exempt nonprofits. Private-sector employers cannot sponsor 401(a) plans; their equivalent is the 401(k).
Eligibility inside the employer is often tighter than in a 401(k). Many 401(a) plans cover specific employee groups: full-time employees above a tenure threshold, employees in designated job classifications, or executives. The employer defines which employees participate, and in many cases participation is mandatory rather than voluntary.
How 401(a) Contributions Work Unlike a 401(k), where the employee controls their contribution percentage within IRS limits, the 401(a) employer sets the contribution formula. It typically takes one of three forms. A mandatory contribution, often a fixed percentage of the employee's compensation that the employee must defer. An employer contribution, where the organization contributes a set percentage regardless of employee participation. A matching contribution, where the employer matches employee voluntary deferrals up to a cap.
These structures often combine. A state agency might require 5% employee contributions and match another 7%, for a total of 12% per paycheck flowing into the 401(a) account.
2026 Contribution Limits The combined employee and employer 401(a) contribution limit for 2026 is $72,000, up from $70,000 in 2025, per the IRS 2026 retirement plan limits . The limit is actually the lesser of $72,000 or 100% of the employee's compensation, which matters for lower-paid employees whose total contributions could theoretically exceed their pay.
A significant difference from 401(k) and 403(b) plans: 401(a) plans do not allow catch-up contributions. Workers age 50 and older cannot add the $8,000 standard catch-up or the $11,250 super catch-up that are available in 401(k), 403(b), and governmental 457(b) plans. Employees looking for extra retirement contributions beyond the 401(a) cap need a separate vehicle.
Can You Have Both a 401(a) and a 403(b) Plan? Yes, and it's common. A public university employee might have mandatory contributions to a 401(a) through the state system plus voluntary contributions to a 403(b) for additional retirement savings. Each plan has its own contribution limit, so contributing to one doesn't reduce the limit on the other. The aggregate limits under Section 415 do apply across both, but most employees don't come close to the ceiling.
Getting 401(a) Administration Right in 2026 For benefits and payroll teams at qualifying organizations, the 2026 checklist is narrow but critical. Update payroll systems with the new $72,000 aggregate contribution limit. Confirm any mandatory contribution formulas are applied correctly to new hires. Verify that older employees aren't being offered catch-up contributions that don't exist in the plan. Coordinate with any companion 403(b) or 457(b) plans so participants understand how the plans fit together.
The most common administrative error in 401(a) plans is applying 401(k)-style rules by default, particularly around catch-up contributions. Plan documents and payroll configurations should be reviewed annually to ensure they match current IRS limits and the plan's specific contribution structure.
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