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Maximum Benefit and Contributions Limits for 2003-2008 |
| As published by the
Internal Revenue Service. |
| |
2008
|
2007
|
2006 |
2005 |
2004 |
2003
|
|
Elective Deferrals (401k & 403b plans) |
$15,500 |
$15,500
|
$15,000 |
$14,000 |
$13,000 |
$12,000 |
|
Annual Benefit Limit
|
$185,000 |
$180,000
|
$175,000 |
$170,000 |
$165,000 |
$160,000 |
|
Annual Contribution Limit
|
$46,000 |
$45,000
|
$44,000 |
$42,000 |
$41,000 |
$40,000 |
|
Annual Compensation Limit |
$230,000 |
$225,000
|
$220,000 |
$210,000 |
$205,000 |
$200,000 |
|
457 Deferral Limit |
$15,500 |
$15,500 |
$15,000 |
$14,000 |
$13,000 |
$12,000 |
|
Highly Compensated Threshold |
$105,000 |
$100,000
|
$100,000 |
$95,000 |
$90,000 |
$90,000 |
|
SIMPLE Contribution Limit |
$10,500 |
$10,500
|
$10,000 |
$10,000 |
$9,000 |
$8,000 |
|
SEP Coverage |
$500 |
$500
|
$450 |
$450 |
$450 |
$450 |
|
SEP Compensation Limit |
$230,000 |
$225,000
|
$220,000 |
$210,000 |
$205,000 |
$200,000 |
|
Income Subject to Social Security |
$102,000 |
$97,500
|
$94,200 |
$90,000 |
$87,900 |
$87,000 |
|
Top-Heavy Plan Key Employee Comp |
$150,000 |
$145,000
|
$140,000 |
$135,000 |
$130,000 |
$130,000 |
|
Catch-Up Contributions |
$5,000 |
$5,000
|
$5,000 |
$4,000 |
$3,000 |
$2,000 |
|
SIMPLE Catch-Up Contributions |
$2,500 |
$2,500
|
$2,500 |
$2,000 |
$1,500 |
$1,000 |
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 compensation
threshold is based on the year in which the preceding plan year
begins.
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. |
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