[18118]
October 21, 2004
TO: PENSION MEMBERS No. 56-04
PENSION OPERATIONS ADVISORY COMMITTEE No. 74-04
RE: IRS ANNOUNCES PENSION PLAN LIMITATIONS FOR 2005
The Internal Revenue Service has released cost of living and other adjustments
applicable to dollar limitations for pension plans. Effective for tax year 2005, the new dollar
limitations include, but are not limited to, the following:
Limit 2004 2005
Defined benefit plan limit, IRC 415(b)(1)(A) $165,000 $170,000
Defined contribution plan limit, IRC 415(c)(1)(A) $41,000 $42,000
Annual compensation limit
IRC 401(a)(17), 404(l), 408(k)(3)(C) and 408(k)(6)(D)(ii)
$205,000 $210,000
Limit used for definition of highly compensated
employee, IRC 414(q)(1)
$90,000 $95,000
Elective deferral limit, IRC 402(g) $13,000 $14,000
Deferral limit for state and local governments and tax-
exempt organizations, IRC 457(e)(15)
$13,000 $14,000
SEP compensation amount, IRC 408(k)(2)(C) $450 $450
SIMPLE contribution limit, IRC 408(p)(2)(E) $9,000 $10,000
Catch-up contributions to qualified plans, 403(b) plans
and 457 plans, IRC 414(v)(2)(B)(i)
$3,000 $4,000
Catch-up contributions to SIMPLE plans
IRC 414(v)(2)(B)(ii)
$1,500 $2,000
To see the IRS release discussing all plan limit changes for 2005, you may also go to
http://www.irs.gov/newsroom/article/0,,id=130346,00.html.
Kathy D. Ireland
Senior Associate Counsel