The new limits provide increased opportunities for retirement plan sponsors and their employees.
- The term “annual additions” generally means the sum for any year of employer contributions, employee contributions, and forfeitures.
- For plans that include salary deferral features, individuals who are age 50 and older by the end of the calendar year may make catch-up contributions in addition to the annual addition limit, if catch-up contributions are permitted under the plan.
Notes for off-calendar plan years:
- Deferral limits are on a calendar year basis, regardless of plan year.
- Use the taxable wage base (TWB) in effect at the beginning of the plan year.
- Use the annual compensation limit in effect at the beginning of the plan year.
- Use the annual additions limit in effect at the end of the plan year.
FuturePlan by Ascensus provides plan design, administration, and compliance services and is not a broker-dealer or an investment advisor. Copyright ©2022. Ascensus, LLC. All Rights Reserved. 980274-FUT-999359 (10/2022)