Overview of 415 Limits

There are limits placed on the amount of annual contributions that can be made on behalf of a defined contribution plan participant or the amount of benefits that can be paid to a participant in a defined benefit plan. These limits are determined under Section 415 of the Internal Revenue Code. This PeopleBook generally refers to Section 415 limits as "415 limits."

Pension Administration deals with Section 415(b) limits on the total benefit from all defined benefit plans. For historical calculations effective prior to the implementation of the Small Business Job Protection Act of 1996 (SBJPA), the system can also apply Section 415(e) limits on the amount employees can receive from defined benefit plans relative to benefits received from their defined contribution plans.

Because 415 limits apply to multiple plans, the calculation handles this function somewhat differently from any other. You create a single 415 limits function result for all plans.