2006 Plan Limits Announced
by Larry Shippee
On October 14, 2005 the IRS announced cost of living adjustments to the various dollar limits that are applicable to qualified plans. The 401(k) limit was raised to $15,000 ($20,000 with catch up), the defined contribution limit - $44,000 and the compensation limit - $220,000. Below is a complete list of the limits with a comparison to prior years.
| 401(k) Plan Limits for Plan Year | 2006 | 2005 | 2004 |
| 401(k) Elective Deferrals | $15,000 | $14,000 | $13,000 |
| Annual Defined Contribution Limit | $44,000 | $42,000 | $41,000 |
| Annual Compensation Limit | $220,000 | $210,000 | $205,000 |
| Catch-Up Contribution Limit | $5,000 | $4,000 | $3,000 |
| Highly Compensated Employees | $100,000 | $95,000 | $90,000 |
| Non 401(k) Related Limits | 2006 | 2005 | 2004 |
| 403(b) / 457 Elective Deferrals | $15,000 | $14,000 | $13,000 |
| SIMPLE Employee Deferrals | $10,000 | $10,000 | $9,500 |
| SIMPLE Catch-Up Deferral | $2,500 | $2,000 | $1,500 |
| SEP Minimum Compensation | $450 | $450 | $450 |
| SEP Annual Compensation Limit | $220,000 | $210,000 | $205,000 |
| Social Security Wage Base | $94,200 | $90,000 | $87,900 |
| Defined Benefit Limit | $175,000 | $170,000 | $165,000 |