Annual Plan Limits

The new limits provide increased opportunities for retirement plan sponsors and their employees.

Additional information:

• 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.

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