Employee Elective Contributions
The maximum amount individual employees can contribute annually to a 401(k) plan account is determined by the IRS. As a result of the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"), the maximum contribution limit increased to $15,000. After 2006, the maximum contribution limit is indexed in $500 increments for inflation. The EGTRRA salary deferral limit increases were called to sunset in 2010 and revert to previous levels, but the Pension Protection Act of 2006 ("PPA") made permenent the increased salary deferral limits.
|
Limitation
Year |
Salary Deferral Limit
|
Catch-Up Limit
(If Participant is Over Age 50 and the Plan Permits) |
|---|---|---|
|
2002
|
$11,000
|
$1,000
|
|
2003
|
$12,000
|
$2,000
|
|
2004
|
$13,000
|
$3,000
|
|
2005
|
$14,000
|
$4,000
|
|
2006
|
$15,000
|
$5,000
|
|
2007
|
$15,500
|
$5,000
|
|
2008
|
$15,500
|
$5,000
|
|
2009
|
$16,500
|
$5,500
|
|
2010
|
$16,500
|
$5,500
|
