IRC 415 Annual Contribution and Benefit Limits: Qualified Plan Compliance and SECURE 2.0 Super Catch-Up -- Practitioner Guide

1. Introduction

IRC 415 is the master ceiling statute for qualified retirement plan contributions and benefits. Every defined contribution (DC) plan and defined benefit (DB) plan subject to ERISA must operate within these annual limits or face immediate qualification risk and excise tax exposure. For 2026, the IRC 415(c) annual addition limit for DC plans is $72,000 and the IRC 415(b) benefit limit for DB plans is $290,000, both per IRS Information Release IR-2025-226 (October 2025). Verify current-year figures at IRS.gov before advising clients or amending plan documents, as limits adjust annually with COLA.

This practitioner guide covers the five core IRC 415 compliance areas: (1) the annual addition limit under IRC 415(c), (2) the defined benefit limit under IRC 415(b) and the compensation ceiling under IRC 401(a)(17), (3) the age-50-plus catch-up under IRC 414(v) and the 2026 Roth catch-up mandate under SECURE 2.0, (4) the new super catch-up for ages 60-63 under IRC 415(v)(3) -- first effective for limitation years beginning January 1, 2026 -- and (5) plan aggregation rules under IRC 415(f) and the IRC 4979 excise tax for excess contributions.

This guide is intended for CPAs, enrolled agents, ERISA counsel, and retirement plan administrators. It does not constitute legal, tax, or plan administration advice for any specific client engagement.

2. IRC 415(c) Annual Addition Limit for Defined Contribution Plans

2.1 The 2026 Limit

For limitation years beginning in 2026, the annual addition ceiling under IRC 415(c)(1)(A) is $72,000 per participant (IRS IR-2025-226, October 2025). This is a per-participant ceiling applied at the plan level (with aggregation across related-employer plans, as discussed in Section 6). Verify current-year figures at IRS.gov, as limits adjust annually with COLA.

2.2 What Is an Annual Addition?

Under IRC 415(c)(2), the term "annual addition" means the sum, credited to a participant's account during the limitation year, of:

• Employer contributions (including matching and nonelective contributions);
• Employee elective deferrals (pre-tax and Roth);
• After-tax employee contributions (voluntary or mandatory); and
• Reallocated forfeitures.

The following items are expressly excluded from annual additions and do not count toward the $72,000 limit:

• Loan repayments;
• Rollover contributions; and
• Restorative payments (payments made to restore losses resulting from fiduciary breaches).

2.3 Limitation Year

The limitation year is generally the plan year. A plan may designate any consecutive 12-month period as its limitation year, but once established it may be changed only with IRS consent. Annual additions are allocated to the limitation year in which they are credited to a participant's account, not the year of contribution.

The $72,000 ceiling applies to each limitation year independently. There is no carryforward of unused limit capacity from one year to the next.

3. IRC 415(b) Defined Benefit Annual Benefit Limit and the IRC 401(a)(17) Compensation Ceiling

3.1 IRC 415(b) -- Defined Benefit Annual Benefit Limit

For defined benefit plans, IRC 415(b) limits the annual benefit payable (not contributions) to a participant to the lesser of:

• $290,000 for 2026 (IRS IR-2025-226); or
• 100% of the participant's average annual compensation for the three consecutive highest-paid years.

The $290,000 applies to benefits payable in the form of a straight-life annuity commencing at age 62 through 65. Actuarial adjustment applies in both directions:

• Benefits commencing before age 62 must be reduced to the actuarial equivalent of the straight-life limit, generally resulting in a lower dollar ceiling.
• Benefits commencing after age 65 are adjusted upward to the actuarial equivalent, permitting a higher dollar amount.

The IRC 415(b) limit applies to the benefit payable under the plan's normal form. If a plan permits optional payment forms, the adjustment to the 415(b) limit uses prescribed actuarial factors, not plan-specific factors, for benefits with a minimum-value feature.

3.2 IRC 401(a)(17) -- Compensation Limit

Under IRC 401(a)(17), employer contributions, benefit accruals, and allocations under any qualified plan must be computed using compensation no greater than $360,000 for 2026 (IRS IR-2025-226). This limit applies to all plan types: 401(k), profit-sharing, money purchase pension, and defined benefit. Verify current-year figures at IRS.gov, as the limit adjusts annually with COLA.

Key compliance points for IRC 401(a)(17):

• Plan formulas that define benefits or allocations as a percentage of compensation must cap the compensation input at $360,000.
• The IRC 401(a)(17) compensation limit interacts with the IRC 415(b) 100%-of-compensation cap: a participant earning $500,000 has a compensation limit of $360,000 for plan purposes, making the 100%-of-compensation cap $360,000 (below the $290,000 statutory limit for most participants at mid-level plans).
• The family attribution rules that applied under prior law no longer require compensation to be split among family members for plan purposes; the $360,000 limit applies per covered employee.

4. IRC 414(v) Age-50-Plus Catch-Up Contributions and the 2026 Roth Catch-Up Mandate

4.1 Standard Catch-Up for Age 50 and Older

IRC 414(v) permits participants who have attained age 50 by the end of the calendar year to make catch-up contributions to a 401(k), 403(b), or governmental 457(b) plan above the otherwise-applicable elective deferral limit. The 2026 catch-up limit under IRC 414(v) is $8,000 (IRS IR-2025-226).

The age-50-plus catch-up is an add-on; it does not count toward the $72,000 IRC 415(c) annual addition limit. A participant age 50 or older in 2026 may contribute up to $23,500 in elective deferrals (the standard 2026 402(g) limit) plus $8,000 in catch-up deferrals, for a total elective deferral of $31,500, and still layer employer contributions and after-tax amounts on top, subject to the $72,000 annual addition ceiling (plus the $8,000 catch-up on top of that).

4.2 Roth Catch-Up Mandate: Mechanics

The Roth catch-up mandate applies at the individual participant level based on FICA wages paid by the sponsoring employer (not self-employment income, not wages from a different employer). Key operational points:

• The $145,000 threshold is indexed for COLA; verify the current threshold at IRS.gov each year.
• The threshold test uses FICA wages in the prior calendar year, not the current year.
• A participant who first exceeds $145,000 in 2025 must make catch-up contributions as Roth in 2026.
• If the plan lacks a designated Roth account feature, the plan administrator must either add Roth or treat the catch-up election as null for affected participants -- a plan design decision with significant participant-relations and testing implications.
• Low earners (FICA wages at or below $145,000) may continue to direct catch-up contributions to the pre-tax source if the plan permits.

5. IRC 415(v)(3) Super Catch-Up for Ages 60-63 (SECURE 2.0, First Effective Year 2026)

5.1 Statutory Authority and Effective Date

SECURE 2.0 (Division T of the Consolidated Appropriations Act, 2023) added IRC 415(v)(3), creating an enhanced catch-up contribution opportunity for participants in the four-year window immediately preceding normal Medicare eligibility. The provision is operative for limitation years beginning January 1, 2026 -- meaning calendar-year plans may first apply it for contributions made in 2026.

5.2 Eligible Participants

A participant is eligible for the super catch-up in any limitation year in which they will attain age 60, 61, 62, or 63. Eligibility is determined as of whether the participant reaches the applicable age at any point during the limitation year, not at the beginning of the year. A participant who turns 60 in December 2026 is eligible for the full super catch-up throughout 2026.

The super catch-up is not available under SIMPLE IRA plans or SIMPLE 401(k) plans. Those plan types have a separate enhanced catch-up rule under SECURE 2.0 that operates on a different formula.

5.3 The 2026 Super Catch-Up Amount

The super catch-up equals the greater of:

• $10,000 (not indexed until 2026 -- the $10,000 floor itself adjusts for COLA in later years); or
• 150% of the otherwise-applicable catch-up amount for the limitation year.

For 2026, 150% of the 2025 standard catch-up amount of $7,500 equals $11,250. Because $11,250 exceeds the $10,000 floor, the 2026 super catch-up is $11,250 (confirm the exact 2026 figure at IRS.gov/IR-2025-226; the 150%-of-prior-year formula may be adjusted by subsequent IRS guidance). Verify current-year figures at IRS.gov before advising clients, as limits adjust annually.

The super catch-up does not count toward the $72,000 IRC 415(c) annual addition ceiling, consistent with how the standard catch-up is treated.

5.4 Age-64 Reversion

Once a participant attains age 64 -- meaning for any limitation year in which they reach age 64 or older and do not qualify under the 60-through-63 window -- they revert to the standard age-50-plus catch-up of $8,000 (as adjusted for COLA). There is no tapering or partial-year proration within the super catch-up window.

5.5 Roth Requirement for High Earners

The Roth catch-up mandate discussed in Section 4 applies equally to the super catch-up. Participants with FICA wages exceeding $145,000 from the sponsoring employer in the prior year must make the super catch-up as a designated Roth contribution. Consult independent counsel, as SECURE 2.0 Section 603 implementation guidance may be pending.

6. Plan Aggregation Under IRC 415(f) and Controlled Group Rules

6.1 Core Aggregation Rule

Under IRC 415(f)(1), all defined contribution plans maintained by an employer are treated as a single plan for purposes of the annual addition limit. If two or more employers are members of a controlled group or affiliated service group under IRC 414(b), (c), (m), or (o), all plans of all group members are aggregated as if maintained by a single employer.

6.2 SEP-IRA Stacking with Qualified Plans

A simplified employee pension (SEP-IRA) is treated as a defined contribution plan for IRC 415 purposes. Employer contributions to a SEP-IRA and employer contributions to a 401(k) profit-sharing plan for the same participant at the same employer aggregate toward the single $72,000 limit. Example: if an employer contributes $35,000 to a participant's 401(k) account (employer match plus nonelective) and also makes a $30,000 SEP-IRA contribution for the same participant, the combined $65,000 must be tested against the $72,000 ceiling. The participant's own elective deferrals to the 401(k) are also annual additions that must be added to arrive at the total.

6.3 DB and DC Plan Aggregation

IRC 415(f)(3) provides that the IRC 415(b) defined benefit limit and the IRC 415(c) defined contribution limit are tested separately. There is no combined fraction test under current law (the combined limit fraction was repealed by EGTRRA 2001). A participant covered under both a DB plan and a DC plan at the same employer is subject to the $290,000 benefit limit under IRC 415(b) in the DB plan and the $72,000 annual addition limit under IRC 415(c) in the DC plan, tested independently.

7. IRC 4979 Excise Tax and Correction Procedures for Excess Annual Additions

7.1 The 10% Excise Tax

IRC 4979 imposes a 10% excise tax on the employer for excess annual additions -- the amount by which annual additions to a participant's account exceed the IRC 415(c) limit. The excise tax is assessed against the plan (technically, against the employer maintaining the plan) and is reported on IRS Form 5330, with the tax due by the last day of the seventh month following the plan year in which the excess arose.

7.2 Correction Methods

The primary correction mechanism is distribution of the excess amount, including allocable income, to the affected participant. Alternatively, the excess may be corrected by adjusting forfeiture reallocation to reduce the participant's account in future periods. The IRS Employee Plans Compliance Resolution System (EPCRS) provides self-correction and voluntary correction pathways that may reduce or eliminate the IRC 4979 excise tax if the excess is identified and corrected in a timely manner. Consult ERISA counsel on the correct EPCRS pathway for each error type, as the procedures and timelines differ between self-correction and submission-based correction.

7.3 Common Causes of IRC 415 Excesses

• Failure to aggregate controlled group plans before allocating employer contributions;
• Mid-year plan sponsor changes that result in two employers contributing to the same plan without reducing contributions;
• After-tax contribution programs that push total annual additions above $72,000, especially in plans that use after-tax contributions to fund mega-backdoor Roth conversions;
• Forfeiture reallocation that pushes a highly compensated employee's annual additions over the ceiling; and
• SEP-IRA contributions at a business that also maintains a 401(k), with no cross-plan aggregation performed.

8. 2026 Retirement Plan Limit Reference Table

9. Frequently Asked Questions