• 401(k) Overview
• Sample 401(k) Plan Outline
2003/2004 Qualified Plan Limitations
The Internal Revenue Service cost-of-living adjustment schedule is applicable to the dollar limitations on individual investment and contributions to qualified plans as provided in section 415(d) of the code.
| 2003 | 2004 | |
| Code Section 415 Limits | ||
| Defined Benefit 415(b)(1)(A) | $160,000 | $160,000 |
| Defined Contribution 415(c)(1)(A) | $40,000 | $40,000 |
| 401(k) Deferral Limit 402(g)(1) | $12,000 | $13,000 |
| Simple Deferral Limit 408(a) | $8,000 | $9,000 |
| Compensation Limit 401(a)(17) & 404(1) | $200,000 | $200,000 |
| Social Security Taxable Wage Base | $84,900 | $84,900 |
| SEP Compensation Threshold 408(k)(2)(C) | $500 | $500 |
| Highly Compensated Employee Limits 414(q)(1)(B) | $95,000 | $100,000 |
Defined-Benefit Plan Limit
The new law will increase the maximum pension benefit a retiree can receive
under a defined-benefit plan from $140,000
a year to $160,000 a year beginning in 2002.
Defined-Contribution Plans
Under the old law, the overall amount that could be added each year to defined-contribution plans (including employer and employee contributions) was limited to the lesser of 25 percent of compensation or $35,000. The new law will increase the percentage of compensation limit to 100 percent and the dollar limit to $40,000 beginning in 2002.
Employer Deduction For Profit-Sharing, Stock Bonus Plans
The limit on deductions for employer contributions to a profit-sharing or stock bonus plan will increase from 15 percent to 25 percent of compensation beginning in 2002.
Compensation Limit
The maximum amount of compensation that can be taken into account for purposes
of determining contributions and benefits under a retirement plan will increase
from $170,000 to $200,000 in 2002.
For additional information : (PSCA) Profit
Sharing/401(k) Council of America