Definition
The annual benefit limit for defined benefit plans is the lesser of:
A) 100% of the participant’s average compensation for his or her highest 3 consecutive calendar years
B) The dollar limit that is in effect for the year
| Year |
2017 |
2016 |
2015 |
2014 |
2013 |
2012 |
2011 |
| Limit |
$215,000 |
$210,000 |
$210,000 |
$210,000 |
$205,000 |
$200,000 |
$195,000 |
|
2018 |
2019 | 2020 | 2021 | 2022 | |||
|
$220,000 |
$225,000 | $230,000 | $230,000 | $245,000 |
Referring Cite
IRC § 415(b)(1)(A) and IRC § 415(c)(1)(A), Treas Reg §1.415(c)-1
Additional Helpful Information
- Contributions to a defined benefit plan are based on what is needed to provide definitely determinable benefits to plan participants. Actuarial assumptions and computations are required to figure these contributions. Generally, you will need continuing professional help to have a defined benefit plan.
- Forfeitures under a defined benefit plan cannot be used to increase the benefits any employee would otherwise receive under the plan. Forfeitures must be used instead to reduce employer contributions.
