1999 Qualified Plan Limits
Most of the limits affecting qualified retirement plans are indexed to inflation,
subject to certain rounding rules. The key limits for 1999 are:
$10,000 |
Maximum employee pre-tax deferral in a 401(k) or 403(b) plan (Unchanged
from 1998). |
$6,000 |
Employee deferral limit for SIMPLE plans (IRA and 401(k) versions)
(unchanged). |
$8,000 |
Deferral limit for Section 457 governmental deferred compensation plans
(unchanged). |
$30,000 |
Annual addition limit for defined contribution plans (unchanged). |
$160,000 |
Maximum compensation that can be considered in a qualified retirement plan
(unchanged). Certain grand-fathered governmental plans may use a limit of $270,000 (was
$265,000 in 1998). |
$130,000 |
Maximum annual pension payable from a defined benefit plan at age 65 as a life only
annuity (unchanged). Adjusted for early payment and other forms of annuity. The
limit applies to 1999 retirements. Factor for retirees limited to 100% of final
average pay is 1.016. |
$80,000 |
The dollar limit in the definition of "highly compensated employees" for
nondiscrimination testing (unchanged). The rules were changed for 1997 under Pension Simplification. The new definition includes
only
 | a) 5% owners or |
| b) employees earning over $80,000 (indexed to the Consumer Price Index and based on the
prior year's compensation). The employer may elect to limit the over $80,000 pay group to
the top 20% of payroll. |
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