Do the tax-deferred extra contributions 401(k)participants make after the age of 50 amount to a tax shelterfor wealthy Americans?

The answer to that may depend on the definition of affluent.

The original draft of the Senate mark-up of the Tax Cuts andJobs Act included a provision that would eliminate catch-upcontributions for those making more than$500,000 a year.

Days after its release, Sen. Orin Hatch, R-UT, chair of theSenate Finance Committee, introduced an amendment that wouldeliminate all pre-tax catch-up contributions, and extend theexisting limit of $6,000 in extra contributions for savers over 50to $9,000.

Under the amendment, all catch-up contributions would be made onan after-tax, or Roth basis.

Of course, both provisions were cut from the amended mark-up nowbeing considered by the Senate Finance Committee.

But they nonetheless raise the question of whether catch-upcontributions are used only by wealthy savers.

Susan Jennings, General Counsel of National Life, a member ofthe Indexed Annuity Leadership Council, says her firm’s experienceadministering 403(b) plans for non-profit educational institutionsshows catch-up contributions made by teachers counter the premisethat extra contributions are only made by the wealthy.

“The Senate was trying to look at catch-up contributions as away to tax more affluent savers, but it’s a misconception thatpeople maxing out contributions are always wealthy,” said Ms.Jennings.

National Life does not break out specific numbers on the incomelevels of participants that do take advantage of catch-updeferrals. Ms. Jennings says most participants in National Life403(b) plans can’t make the extra contributions until shortlybefore retirement.

“The proposed limits would affect a lot of people,” she said,citing a common example of teachers receiving a lump sum for unusedsick leave at retirement. That money is often invested by teachersin their 403(b) plans on a pre-tax basis, explained Ms.Jennings.

“It’s common enough that it’s an everyday occurrence,” sheadded.

While all pre-tax contributions to traditional definedcontribution plans have so far survived tax reform, the latest datafrom the Joint Committee on Taxation suggests the Senate version oftax reform is still susceptible to considerable changes.

Amendments that would repeal the Affordable Care Act’sindividual mandate, and sunset tax cuts in 2025, negativelyimpacted the JCT’s distribution tables on how tax reform wouldimpact the middle-class—and in big ways.

By 2027, all income brackets below $75,000 would see taxincreases. Those making between $20,000 and $30,000 would see a 25percent increase in taxes. Meantime, those making more than $1million would see the largest decrease in their taxes.

Those numbers will be difficult to square in the court of publicopinion. On Thursday, Democrats on the Senate Finance Committeespared no opportunity to note the imbalances in the amended versionof the TCJA.

Whether catch-up contributions will reemerge as a pay for isanyone’s guess.

Here are six key data points on catch-up deferrals that helpilluminate just who uses them, and whether they only benefitwealthy savers.

1. Average 401(k) balance of $456,100

As of the end of 2016, 11.5 percent of eligible participants inplans administered by Fidelity made catch-up contributions.

Their average account balance was $456,100.

As a representative from Fidelity noted, that’s a “pretty solid”account balance. But it doesn’t necessarily qualify a saver asaffluent.

Fidelity recommends that workers aim to save 10 times theirincome at retirement. A pre-retiree earning $90,000 with a 401(k)balance of $456,100 would be a long way from that benchmark.

2. 12 percent of Vanguard participants

Nearly all plans administered by both Fidelity and Vanguardoffer catch-up contributions.

In large plans administered by Vanguard, 12 percent of eligibleparticipants took advantage of extra deferrals, according to thefirm’s How America Saves study.

3. $250,000

Of eligible participants with more than $250,000 saved, 40percent made catch-up contributions in large plans administered byVanguard.

And 12 percent with balances between $100,000 and $250,000 madecatch-up deferrals.

4. Lower wage earners rarely make catch-up contributions

About 40 percent of savers making more than $100,000 a year madecatch-up contributions.

The number drops precipitously as income does. Only 2 percent ofVanguard participants making between $50,000 and $75,000 madecatch-up contributions; and only 1 percent of those making between$30,000 and $50,000 were able to.

5. Using the catch-up to catch up

Some savers in their 50s and 60s who are significantly laggingin savings certainly do use catch-up contributions, according toVanguard’s numbers.

Almost 10 percent with balances between $50,000 and $100,000made catch-up contributions in 2016.

At age 55, Fidelity recommends savers aim to have accumulatedseven times their income level.

6. Participants in small businesses use catch-ups athigher rates

Vanguard participants in smaller plans, with less than $20million in total assets, use catch-up contributions at higherrates.

In 2016, 17 percent of savers over age 50 maxed outcontributions. They tended to have higher incomes, and“substantially higher” account balances, according to Vanguard.