|
Maximum
Pension Benefit and Contributions Limits for 2006-2010
|
|
As published by the Internal
Revenue Service October 15, 2009.
|
|
|
2010 |
2009 |
2008 |
2007 |
2006 |
|
Elective
Deferrals (401k & 403b plans) |
$16,5003 |
$16,5003 |
$15,500
|
$15,500 |
$15,000 |
|
Annual
Benefit Limit |
$195,0001 |
$195,0001 |
$185,000 |
$180,000 |
$175,000 |
|
Annual
Contribution Limit |
$49,0002 |
$49,0002 |
$46,000 |
$45,000 |
$44,000 |
|
Annual
Compensation Limit |
$245,0005 |
$245,0005 |
$230,000 |
$225,000 |
$220,000 |
|
457
Deferral Limit |
$16,5003 |
$16,5003 |
$15,500
|
$15,500 |
$15,000 |
|
Highly
Compensated Threshold |
$110,0006 |
$110,0006 |
$105,000 |
$100,000 |
$100,000 |
|
SIMPLE
Contribution Limit |
$11,5009 |
$11,5009 |
$10,500
|
$10,500 |
$10,000 |
|
SEP
Coverage |
$550 |
$550 |
$500 |
$500 |
$450 |
|
SEP
Compensation Limit |
$245,0005 |
$245,0005 |
$230,000 |
$225,000 |
$220,000 |
|
Income
Subject to Social Security |
$106,800 |
$106,800 |
$102,000 |
$97,500 |
$94,200 |
|
Top-Heavy
Plan Key Employee Comp |
$160,000 |
$160,000 |
$150,000 |
$145,000 |
$140,000 |
|
Catch-Up
Contributions |
$5,5004 |
$5,5004 |
$5,000
|
$5,000 |
$5,000 |
|
SIMPLE
Catch-Up Contributions |
$2,50010
(no
change) |
$2,50010
(no
change) |
$2,500
|
$2,500 |
$2,500 |
Source:
http://www.IRS.gov
For
A Web Page version
-
Click
Here, or use the 'BACK' key
|
Legend: |
|
1 |
EGTRRA provides
the lesser of $160,000, with Cost of Living Adjustment
(COLA) increase, if any, in $5,000 increments after
2002 or 100% of the employee’s average compensation for his
high 3 years. |
|
2 |
EGTRRA provides
the lesser of $40,000 with COLA increase, if any, in $1,000
increments after 2002 or 100% of employee
compensation. NOTE: 1. The 100% is reduced to 25% for SEPs
by the contribution limitations of IRC §402(h)(2)(A), and 2.
SIMPLEs are not subject to IRC §415. |
|
3 |
Increasing by
$1,000 each year in 2004-6; thereafter, COLA increase, if
any, in $500 increments. |
|
4 |
Increasing by
$1,000 each year in 2004-6; thereafter, COLA increase, if
any, in $500 increments. |
|
5 |
COLA increase,
if any, in $5,000 increments after 2002. |
|
6 |
$105,000 is 2008
Comp for HCE’s in 2009, $110,000 is 2009 Comp for HCE’s in
2010. |
|
7 |
Amount used to
determine the lengthening of the 5-year distribution period. |
|
8 |
Amount used for
determining the maximum account balance in an ESOP subject
to a 5-year |
|
9 |
Increasing by
$1,000 each year in 2004-5; thereafter, COLA increase, if
any, in $500 increments. |
|
10 |
Increasing by
$500 each year in 2004-6; thereafter, COLA increase, if any,
in $500 increments. |
The Elective Deferral Limit is the
maximum contribution that can be made on a pre-tax basis to a
401(k) or 403(b) plan (Internal Revenue Code section 402(g)(1)).
Some still refer to this as the $7,000 limit (its original setting
in 1987).
The 457 Deferral Limit is a similar
restriction, applied to certain government plans (457 plans).
The Annual Benefit Limit is the maximum
annual benefit that can be paid to a participant (IRC section
415). The limit applied is actually the lessor of the dollar limit
above or 100% of the participant's average compensation
(generally the high three consecutive years of service). The
participant compensation level is also subjected to the Annual
Compensation Limit noted above.
The Annual Contribution Limit is the
maximum annual contribution amount that can be made to a
participant's account (IRC section 415). This limit is actually
expressed as the lessor of the dollar limit or 100% of the
participant's compensation, applied to the combination of employee
contributions, employer contributions and forfeitures allocated to
a participant's account. This limit was increased for the first
time since its inception last year.
In calculating contribution allocations, a plan
cannot consider any employee compensation in excess of the Annual
Compensation Limit (401(a)(17)). This limit is also imposed in
determining the Annual Benefit Limit (above). In calculating
certain nondiscrimination tests (such as the Actual Deferral
Percentage), all participant compensation is limited to this
amount, for purposes of the calculation.
The Highly Compensated Threshold (section
414(q)(1)(B)) is the minimum compensation level established to
determine highly compensated employees for purposes of
nondiscrimination testing.
The SIMPLE Contribution Limit is the
maximum annual contribution that can be made to a SIMPLE (Savings
Incentive Match Plan for Employees) plan. SIMPLE plans are
simplified retirement plans for small businesses that allow
employees to make elective contributions, while requiring
employers to make matching or nonelective contributions.
SEP Coverage Limit is the minimum
earnings level for a self-employed individual to qualify for
coverage by a Simplified Employee Pension plan (a special
individual retirement account to which the employer makes direct
tax-deductible contributions.
The SEP Compensation Limit is applied in
determining the maximum contributions made to the plan.
Catch up Contributions, SIMPLE
"Catch up" deferral: Under the Economic Growth
and Tax Relief Act of 2001 (EGTRRA), certain individuals aged 50
or over can now make so-called 'catch up' contributions, in
addition to the above limits.
EGTRRA also added the Top-heavy plan key
employee compensation limit.
NOTICE:
This Table is designed to provide an overview of the 2010 COLAS and
is not intended to be comprehensive. Executive Benefit Plans, Inc.,
and its representatives cannot give ERISA, tax or legal advice. This
material is provided for informational purposes only and should not
be construed as ERISA, tax or legal advice. Interested parties must
consult and rely solely upon their own independent advisors
regarding their particular situation and the concepts presented
here. Although care has been taken in preparing this material and
presenting it accurately, we disclaim any express or implied
warranty as to the accuracy of any material contained herein and any
liability with respect to it.
|
|