Budget Puts Pinch on 401(k) Savings : Income: Those making more than $64,000 annually may find they can’t contribute as much to their plans next year.

Employees making more than $64,000 a year may find they can’t put as much in their 401(k) plans next year as they did this year because of a little-noted provision in the Clinton tax and budget bill.

The bill limits tax-deferred contributions of very high-earning employees--those making more than $150,000 a year.

But because maximum pension contributions are determined by complex formulas that balance contributions of high-salary workers with those of lower-earning employees, the changes may affect anyone earning more than $64,245 in 1993.

Those people--just above the threshold--may find the amount they can set aside will be squeezed.

For example, someone who makes $70,000 a year and contributed $7,000 to a 401(k) plan in 1993 might be allowed to contribute only $4,200 in 1994, warned Robert Scharff, a partner in the St. Louis office of the Todd Organization, a national benefits consulting firm.

That is because the earnings of those workers are grouped with those of people earning much more, even though the object of the law was to focus on the more highly paid earners.

While the law lets companies determine their own mix for contributions by the group, most often it is the people at the lower end of the scale who are forced to reduce their contributions.

A single employee earning $70,000 would pay an additional $868 in federal taxes on that $2,800 in income not set aside, as well as state income taxes in most places.

Treasury Department rules prohibit 401(k) plans from being “top heavy.” Typically, the average percentage contribution of highly compensated workers (those over that $64,235 threshold) can’t be more than 2 percentage points more than the percentage contributed by lower-compensated workers. So if the low earners are setting aside 4% of their pay, the high earners cannot set aside more than 6% of theirs.

For 1993, the maximum contribution is $8,994, and the Treasury formula allows employees earning up to $235,840 to use their entire salary in determining their percentage contribution. Since that maximum contribution is such a small percentage for top-earning workers, it allows lower-paid people in the highly compensated group to set aside a higher percentage of their income and not run afoul of the top-heavy rules.

Next year, the law cuts the maximum amount used in the calculation from $235,840 to $150,000.