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2023 benefit facts guide

Limits on contributions and benefits

Multiple statutory limits are set annually by the Internal Revenue Service (IRS) and Social Security Administration that impact employee retirement plans. These limits apply to all size employers that sponsor an employee retirement plan.

Elective deferrals

The maximum annual pre-tax contribution a participant can make to a 401(k), 403(b) or 457 government plan. A participant must aggregate all plan contributions across all plans they have participated in during the year, to determine if they have met this annual limit (IRC 402(g) limit).

Catch-up deferrals

Participants who are age 50 or over in the year of contribution can make catch-up, pretax contributions in addition to elective deferrals.

Defined benefit plan annual limit

The maximum annual benefit that can be paid to a defined benefit participant.

Defined contribution plan annual limit

The maximum total annual employee pre-tax, employer match and employer profit sharing contributions that can be added to a participants account (IRS 415 limit).

Annual compensation limit

The maximum compensation that can be considered in calculating defined contribution employer contributions, defined benefit plan accruals and performing certain nondiscrimination tests.

Highly compensated employee

The minimum compensation used to determine highly compensation employee for nondiscrimination testing.

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