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Groen, Kluka & Company, P.C.
Certified Public Accountants & Management Consultants
888 West Big Beaver Road, Suite 790
Troy, MI 48084
Kevin Delaere
Groen, Kluka & Company, P.C.
888 West Big Beaver Road, Suite 790
Troy, MI 48084
Phone: 248.362.5000
Fax: 248.362-0999
http://www.groenkluka.com
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IRS Announces Pension Plan Limitations for 2006
The Internal Revenue Code provides dollar limitations on benefits and contributions of |
| Annual Qualified Plan Limits | 2006 | 2005 |
Defined Contribution Plan Dollar limit on additions (Section 415(c)(1)(A)) | $44,000 | $42,000 |
Defined Benefit Plan limit on benefits (Section 415(b)(1)(A)) | $175,000 | $170,000 |
Maximum compensation used to determine contributions | $220,000 | $210,000 |
401(k), SARSEP, 403(b) Plan Deferrals (Section 402(g)) & 457 Plan deferrals (Section 457(b)(2)) | $15,000 | $14,000 |
401(k), 403(b), 457 & SARSEP additional "catch-up" contributions for employees age 50 and older | $5,000 | $4,000 |
SIMPLE deferrals (Section 408(p)(2)(A)) | $10,000 | $10,000 |
| Simple additional "catch-up" contributions for employees age 50 and older | $2,500 | $2,000 |
| The dollar amount under Section 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a 5‑year distribution period, and the dollar amount used to determine the lengthening of the 5‑year distribution period | $885,000/ $175,000 | $850,000/ $170,000 |
Compensation defining highly compensated employee (Section 414(q)(1)(B)) | $100,000 | $95,000 |
| Compensation defining key employee (officer) | $140,000 | $135,000 |
| The compensation amounts under Section 1.61‑21(f)(5)(i) of the Income Tax Regulations concerning the definition of “control employee” for fringe benefit valuation purposes | $85,000 | $85,000 |
Compensation triggering Simplified Employee Pension (SEP) contribution requirement (Section 408(k)(2)(c)) | $450 | $450 |