2021 IRS Pension Plan Limits

Pension Limits

The Internal Revenue Service (IRS) recently published its cost-of-living adjustments for the 2021 tax year that will affect dollar limits for pension plans and other retirement-related taxes.

For a detailed list of some of the pension plan limitations, please see the table below. You can also visit the IRS website for more information.

Code Section 2021 2020
Elective deferral (contribution) limit under Code section 402(g) $19,500 $19,500
Catch-up contribution limit under Code section 414(v)(2)(B)(i) $6,500 $6,500
Annual compensation limit under Code section 401(a)(17) $290,000 $285,000
Maximum defined benefit annuity limit under Code section 415(b)(1)(A) $230,000 $230,000
Maximum defined contribution annual additions limit under Code section 415(c)(1)(A) $58,000 $57,000
Highly compensated employee threshhold under Code section 414(q)(1)(B) $130,000 $130,000
Annual compensation limit under Code section 401(a)(17), 404(l), 408(k)(3)(C),and 408(k)(6)(D)(ii) $290,000 $285,000
Dollar limitation concerning the definition of key employee in a top-heavy plan under Code section 416(i)(l)(A)(i) $185,000 $185,000
Allowed cost of living adjustments to the compensation limitation under Code section 401(a)(17) $430,000 $425,000
Deferred compensation plans of state and local governments and tax-exempt organizations under Code section 457(e)(15) $19,500 $19,500
Compensation amounts of the income Tax Regulations concerning the definition of “control employee” for fringe benefit valuation purposes under Code section 1.61-21(f)(5)(i) $115,000 $115,000
Compensation regarding simplified employee pensions (SEPs) under Code section 408(k)(2)(C) $650 $600
Limitation regarding SIMPLE retirement accounts under Code section 408(p)(2)(E) $13,500 $13,500
Deductible amount for an individual making qualified retirement contributions under Code section 219(b)(5)(A) $6,000 $6,000