As a courtesy by Don Motel, who runs DGM Company in Wayne, Pennsylvania, I thought it would be helpful to pass along the maximum limit adjustments for 2006 pension and profit sharing plans together with 2004 and 2005 limits for comparison:
MAXIMUM LIMITS
| 2004 | 2005 | 2006 | |
| Section 415 Maximums: | |||
|
165,000 | 170,000 | 175,000 |
|
41,000 | 42,000 | 44,000 |
| Simple Retirement Account Deferral Limit | 9,000 | 10,000 | 10,000 |
| SEP Compensation Limit | 450 | 450 | 450 |
| 401(k) and 403(b) Elective Deferrals | 13,000 | 14,000 | 15,000 |
| Catch-up for 401(k) | 3,000 | 4,000 | 5,000 |
| Section 457 Deferral Limit | 13,000 | 14,000 | 15,000 |
| Maximum Compensation for Benefit Purposes | 205,000 | 210,000 | 220,000 |
| Highly Compensated Employee | 90,000 | 95,000 | 100,000 |
| Key Employee | 130,000 | 135,000 | 140,000 |
| Social Security Taxable Wage Base | 87,900 | 90,000 | 94,200 |
Check with your advisors to see if the increased limits permit a larger amount of employee paid deferrals and other benefits.
– – Mike Beausang