The federal government annually publishes updated limitations, which impact the contributions, benefit accruals, and compliance of qualified retirement plans. The below tables summarize the most significant changes in recent history.
Defined Contribution Plans
| Limitation Year | Maximum Benefit Allocation [1] | Elective Deferral Limit [2] | Catch-Up Limit [3] | Annual Comp. Limit [4] | Highly Comp. Employee [5] | Social Security Wage Base [6] |
| 2000 | 30,000 | 10,500 | N/A | 170,000 | 85,000 | 76,200 |
| 2001 | 35,000 | 10,500 | N/A | 170,000 | 85,000 | 80,400 |
| 2002 | 40,000 | 11,000 | N/A | 200,000 | 90,000 | 84,900 |
| 2003 | 40,000 | 12,000 | 2,000 | 200,000 | 90,000 | 87,000 |
| 2004 | 41,000 | 13,000 | 3,000 | 205,000 | 90,000 | 87,900 |
| 2005 | 42,000 | 14,000 | 4,000 | 210,000 | 95,000 | 90,000 |
| 2006 | 44,000 | 15,000 | 5,000 | 220,000 | 100,000 | 94,200 |
| 2007 | 45,000 | 15,500 | 5,000 | 225,000 | 100,000 | 97,500 |
| 2008 | 46,000 | 15,500 | 5,000 | 230,000 | 105,000 | 102,000 |
| 2009 | 49,000 | 16,500 | 5,500 | 245,000 | 110,000 | 106,800 |
| 2010 | 49,000 | 16,500 | 5,500 | 245,000 | 110,000 | 106,800 |
| 2011 | 49,000 | 16,500 | 5,500 | 245,000 | 110,000 | 106,800 |
| 2012 | 50,000 | 17,000 | 5,500 | 250,000 | 115,000 | 110,100 |
Defined Benefit Plans
| Limitation Year | Maximum Benefit Accrual [7] |
| 2000 | 135,000 |
| 2001 | 140,000 |
| 2002 | 160,000 |
| 2003 | 160,000 |
| 2004 | 165,000 |
| 2005 | 170,000 |
| 2006 | 175,000 |
| 2007 | 180,000 |
| 2008 | 185,000 |
| 2009 | 195,000 |
| 2010 | 195,000 |
| 2011 | 195,000 |
| 2012 | 200,000 |
What It Means
[1] - For plan years ending after January 1 of the limitation year, the aggregate allocations to a participant’s account, including forfeitures, cannot exceed the lesser of this limit or 100% of annual compensation. Example: for a plan year ending December 31, 2011, no more than $49,000 may be allocated to a participant's account.
[2] - For the calendar year, 401(k) and 403(b) plan participants may defer up to this limit from their compensation. If the plan includes a Roth feature, the combined amount for both Roth and Pre-Tax is subject to this limit. Example: in the 2011 calendar year, participants may contribute $8,000 Roth + $8,500 Pre-Tax, but may not contribute $16,500 Roth + $16,500 Pretax.
[3] - For the calendar year, 401(k), 403(b), and 457 plan participants who turn age 50 or are age 50+ may defer additional contributions, up to this limit, from their compensation.
[4] - For plan years beginning after January 1 of the limitation year, annual compensation exceeding this limit will not be considered when allocating contributions or in compliance testing. Example: if an employee earns $300,000 in 2010, only $245,000 will be considered for compliance and contribution calculation purposes.
[5] - For plan years beginning after January 1 of the limitation year, anyone whose annual compensation exceeds this figure will be considered highly compensated in the following plan year. Example: if an employee earns $130,000 in the 2010 plan year, the employee will be highly compensated for the 2011 plan year.
[6] - This figure represents the maximum social security integration level for plan years beginning after January 1 of the limitation year. In addition, employees and employers stop paying social security taxes on compensation earned in excess of this limit. As a result, workers do not receive social security benefits for compensation earned in excess of the limit.
[7] - For plan years ending after January 1 of the limitation year, a participant's annual pension benefit cannot exceed the lesser of this limit or 100% of annual compensation.
