The National Directory of Certified Public Accountants

Ask A CPA - Small Business Services

Defined Contribution Plan - Limitation On The Annual Benefit

For 2016, the annual benefit cannot exceed the lesser of: 100% of the participant's average compensation for his or her highest 3 consecutive calendar years or $210,000. For 2014 and 2015, the annual benefit cannot exceed the lesser of: 100% of the participant's average compensation for his or her highest 3 consecutive calendar years or $210,000. For 2013, the annual benefit cannot exceed the lesser of: 100% of the participant's average compensation for his or her highest 3 consecutive calendar years or $205,000.

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