---
title: "New Pension Limitations for 2014"
date: 2013-11-04
author: "Site Admin"
categories:
  - name: "Uncategorized"
    url: "/category/uncategorized.md"
---

# New Pension Limitations for 2014

The Internal Revenue Service recently released the new pension limitations for 2014. Now don’t get too excited; nothing changed drastically.

**Limit**

**2014**

**2013**

Maximum Annual Pension Benefit**$210,000**

$205,000

Maximum Annual Addition (Defined Contribution Plan)**$52,000**

51,000

Maximum Elective Deferral (Defined Contribution Plan)**$17,500**

$17,500

Catch-up Contribution**$5,500**

$5,500

Qualified Plan Compensation Limit**$260,000**

$255,000

SEP Minimum Compensation**$550**

$550

SEP Maximum Compensation**$260,000**

$255,000

SIMPLE Maximum Contributions**$12,000**

$12,000

SIMPLE Catch-up Contributions**$2,500**

$2,500

Highly Compensated Employee**$115,000**

$115,000

Key Employee Compensation**$170,000**

$165,000

Taxable Wage Base**$117,000**

$113,700



<http://www.irs.gov/Retirement-Plans/COLA-Increases-for-Dollar-Limitations-on-Benefits-and-Contributions>

Of note is the fact that the annual addition limitation as a percentage of the full compensation limit remains at 20% (i.e. $52,000/$260,000).

Where a non-elective contribution is used to fill the remaining annual addition limitation on a 401(k) enhanced safe harbor matching plan, that contribution as a percentage of pay increases from 9.14% to 9.27% and, therefore, changes the required gateway from 3.04% to 3.08%.

The IRS claims that some limits, namely those governing defined contribution elective deferrals and catch-ups were not changed due to a slow rise in the Consumer Price Index. They stated that the inflation rate was not significant enough to justify an increase for these limits.

For more information on the new pension limitations for 2014, [click here](http://www.irs.gov/Retirement-Plans/COLA-Increases-for-Dollar-Limitations-on-Benefits-and-Contributions).

*Any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties under the Internal Revenue Code or applicable state or local tax law provisions.*