Effective January 1, 2001, the maximum annual benefit under a defined benefit plan will be increased to $140,000 from $135,000 (section 415(b)(1)(A))
The maximum annual addition limitation for defined contribution plans – the total of employee and employer contributions, as well as forfeitures reallocated to a participant account – will increase to $35,000 from $30,000 annually (section 415(c)(1)(A)).
The section 402(g)(1) limit (aka “the $7,000 limit”) on the exclusion for elective deferrals remains unchanged at $10,500, as does the $85,000 compensation level for highly compensated employees noted in section 414(q)(1)(B). Note that the $10,500 limit might be changed under pending pension reform legislation.
The limit on annual compensation considered under sections 401(a)(17) and 404(l) remains unchanged at $170,000. The compensation amount under section 408(k)(2)(C) regarding simplified employee pensions (SEPs) remains unchanged at $450, while the compensation amount under section 408(k)(3)(C) for SEPs remains unchanged at $170,000.
The annual limitation on deferrals made to section 457 plans is increased from $8,000 to $8,500.
The section contribution limit for simple retirement accounts is increased to $6,500 from $6,000 (408(p)(2)(A)).
These limits were published in IRS News Release IR-2000-82
These limitations may be affected by pending legislation awaiting action by Congress. If this legislation is enacted before the end of the year, some of the cost-of-living adjustments may be modified and announced by the IRS.
– Nevin Adams firstname.lastname@example.org
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