Compliance October 28, 2010

Maximum Benefit and Contributions Limits for 2002-2011

as published by the Internal Revenue Service
Reported by

 

  

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

 2011 

2010 

2009 

2008 

2007 

2006 

2005 

2004 

2003 

2002 

Elective Deferrals (401k & 403b plans) 

$16,500 

$16,500 

$16,500 

$15,500 

$15,500 

$15,000 

$14,000 

$13,000 

$12,000 

$11,000 

Annual Benefit Limit  

$195,000 

$195,000 

$195,000 

$185,000 

$180,000 

$175,000 

$170,000 

$165,000 

$160,000 

$160,000 

Annual Contribution Limit  

$49,000 

$49,000 

$49,000 

$46,000 

$45,000 

$44,000 

$42,000 

$41,000 

$40,000 

$40,000 

Annual Compensation Limit 

$245,000 

$245,000 

$245,000 

$230,000 

$225,000 

$220,000 

$210,000 

$205,000 

$200,000 

$200,000 

457 Deferral Limit 

$16,5000 

$16,500 

$16,500 

$15,500 

$15,500 

$15,000 

$14,000 

$13,000 

$12,000 

$11,000 

Highly Compensated Threshold 

$110,000 

$110,000 

$110,000 

$105,000 

$100,000 

$100,000 

$95,000 

$90,000 

$90,000 

$90,000 

SIMPLE Contribution Limit 

$11,500 

$11,500 

$11,500 

$10,500 

$10,500 

$10,000 

$10,000 

$9,000 

$8,000 

$7,000 

SEP Coverage 

$550 

$550 

$550 

$500 

$500 

$450 

$450 

$450 

$450 

$450 

SEP Compensation Limit 

$245,000 

$245,000 

$245,000 

$230,000 

$225,000 

$220,000 

$210,000 

$205,000 

$200,000 

$200,000 

Income Subject to Social Security 

$106,800 

$106,800 

$106,800 

$102,000 

$97,500 

$94,200 

$90,000 

$87,900 

$87,000 

$84,900 

Top-Heavy Plan Key Employee Comp 

$160,000 

$160,000 

$160,000 

$150,000 

$145,000 

$140,000 

$135,000 

$130,000 

$130,000 

$130,000 

Catch-Up Contributions 

$5,500 

$5,500 

$5,500 

$5,000 

$5,000 

$5,000 

$4,000 

$3,000 

$2,000 

$1,000 

SIMPLE Catch-Up Contributions 

$2,500 

$2,500 

$2,500 

$2,500 

$2,500 

$2,500 

$2,000 

$1,500 

$1,000 

$500 

  

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. 

   

«