What Are the Section 415 Limits for Retirement Plans?

For 2026, the Section 415 limits cap total annual additions to a defined contribution plan at $72,000 and the maximum annual benefit from a defined benefit pension at $290,000, with each figure also subject to a 100%-of-compensation ceiling.¹² These caps sit in Section 415 of the Internal Revenue Code and adjust every year for inflation. Exceeding them can strip a plan of its qualified status, so both the numbers and how they’re calculated matter.

The Defined Contribution Cap

Section 415(c) applies to 401(k), 403(b), and profit-sharing plans. It limits the “annual additions” credited to any one participant’s account during the plan year to the lesser of $72,000 or 100% of that participant’s compensation.³

Annual additions include everything flowing into the account:

Employer contributions, including matching, profit-sharing, and safe harbor amounts
Employee contributions, including pre-tax deferrals, Roth contributions, and voluntary after-tax contributions
Forfeitures reallocated from other participants’ accounts

Compensation for this purpose covers wages, salaries, and other pay for services that count as gross income, plus elective deferrals into a 401(k), Section 125 cafeteria plan, or Section 457 plan. The amount of any one participant’s compensation a plan can use in its calculations is itself capped at $360,000 for 2026.²

The limitation year is usually the plan year, though the plan document can specify a different 12-month period.

How the $72,000 Cap Differs From the $24,500 Deferral Limit

The Section 415 cap is not the same as the elective deferral limit under Section 402(g). The 402(g) limit governs how much you personally can defer into a 401(k) or 403(b) out of your own pay: $24,500 for 2026.⁴ The 415 cap governs the total of everything going in, including employer money and forfeitures.

Both apply at once but to different slices. Someone earning $200,000 might defer $24,500, receive a $12,000 match, and get a $30,000 profit-sharing allocation. That $66,500 fits comfortably under the $72,000 ceiling. Adding another $10,000 in profit-sharing on top would blow through the 415 limit even though the $24,500 deferral is fine on its own.

Governmental 457(b) plans run on a separate track. Contributions to a 457(b) aren’t subject to Section 415 at all, so a public-sector employee with access to both a 403(b) and a governmental 457(b) can contribute up to each plan’s own limit without aggregation.⁵

Catch-Up Contributions Sit Outside the Cap

Participants who are at least 50 by the end of the calendar year can make catch-up contributions above the standard deferral limit. For 2026, that catch-up is $8,000 in a 401(k), 403(b), governmental 457, or Thrift Savings Plan.⁴ Catch-ups do not count as annual additions for Section 415 testing, so they effectively let older workers save above the $72,000 ceiling.

SECURE 2.0 added a higher catch-up tier for participants who turn 60, 61, 62, or 63 during the year. For 2026, that enhanced amount is $11,250 rather than $8,000. At age 64 the participant drops back to $8,000. For SIMPLE plans, the 2026 catch-up is $4,000 at 50 and $5,250 for the 60-through-63 window.²

A separate SECURE 2.0 rule requiring higher earners to make catch-ups on a Roth basis applies to taxable years beginning after December 31, 2026, so it does not affect 2026 contributions.⁶

The Defined Benefit Cap

Defined benefit pensions promise a specific payout at retirement, so Section 415(b) caps the benefit rather than the contribution. The maximum annual benefit is expressed as a straight life annuity, meaning a fixed annual payment for the participant’s lifetime with no survivor benefit.

The annual benefit cannot exceed the lesser of:

Reductions for Short Service

The $290,000 dollar limit is proportionately reduced for participants with fewer than 10 years of service. Seven years of service, for example, drops the cap to 70% of $290,000. The 100% compensation limit is similarly reduced for participants with fewer than 10 years of plan participation.¹

Early or Late Retirement Adjustments

If benefits start before Social Security Retirement Age, the $290,000 cap is reduced to an actuarially equivalent amount that reflects the longer expected payout. Starting benefits after that age produces an upward actuarial adjustment.¹

One exception matters. Police officers, firefighters, emergency medical personnel, and members of the Armed Forces who participate in a state or local government defined benefit plan and have at least 15 years of qualifying service are exempt from the early-retirement reduction and can receive the full dollar limit even if they retire well before Social Security Retirement Age.³ The exemption does not extend to corrections officers, probation officers, or other public safety roles outside police, fire, and EMS.

Aggregation Across Related Employers

An employer cannot sidestep Section 415 by running multiple companies with separate plans. Section 414 treats all employees of related employers as if they worked for a single employer when testing the 415 limits.⁷ Controlled groups generally fall into three categories: parent-subsidiary (one corporation owns at least 80% of another), brother-sister (the same small group of owners controls 80% or more of two or more corporations and has effective control of more than 50% of each), and affiliated service groups (organizations sharing ownership or management that perform services for one another).

For defined contribution plans, annual additions across every plan in the controlled group are combined for each participant, and the sum still cannot exceed $72,000. For defined benefit plans, the combined actuarially equivalent annual benefit from all plans in the group must stay within $290,000.

The same principle catches someone who participates in both a 401(k) and a 403(b) with employers under common control. Section 415(k)(4) treats a 403(b) annuity contract as a defined contribution plan of each employer with the required control relationship, and Section 415(f) then combines all defined contribution plans of the same employer into one for testing.⁸ Failing to identify all members of a controlled group is a common compliance error, and it tends to surface during audits after years of compounding.

What Happens If a Plan Exceeds the Limit

An uncorrected Section 415 violation can disqualify the plan. When that happens, the trust loses its tax exemption and must file its own income tax return and pay tax on its earnings.⁹ The employer loses its contribution deduction in the ordinary sense and can only deduct amounts as they become includible in participants’ gross income. For a defined benefit plan without separate accounts for each employee, the employer may lose the deduction entirely. Contributions also become subject to Social Security, Medicare, and federal unemployment tax as they vest.

Because disqualification is so costly, the IRS runs the Employee Plans Compliance Resolution System (EPCRS) to let sponsors fix Section 415 failures while keeping the plan qualified.¹⁰ EPCRS has three tracks: the Self-Correction Program for insignificant failures or significant failures corrected promptly, the Voluntary Correction Program for formal submissions with IRS approval of the fix, and the Audit Closing Agreement Program when the IRS finds the failure during an examination.

In a defined contribution plan, the correction typically involves distributing or reallocating the excess in a prescribed order that starts with voluntary after-tax contributions, then elective deferrals, and finally employer contributions. Distributions of excess amounts go on Form 1099-R and are taxable in the year received, but the 10% early distribution penalty under Section 72(t) does not apply and the amount cannot be rolled over.¹¹ In a defined benefit plan, the fix is generally to reduce the participant’s accrued benefit to the maximum permissible amount by amendment or actuarial adjustment.

Key 2026 Numbers

Annual additions cap for defined contribution plans: $72,000
Maximum annual benefit for defined benefit plans: $290,000
Elective deferral limit under Section 402(g): $24,500
Catch-up contribution at age 50 and older: $8,000
Enhanced catch-up for ages 60 through 63: $11,250
Compensation cap under Section 401(a)(17): $360,000

1
Internal Revenue Service. COLA Increases for Dollar Limitations on Benefits and Contributions
2
Internal Revenue Service. 2026 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living (Notice 2025-67)
3
Office of the Law Revision Counsel. 26 USC 415 – Limitations on Benefits and Contribution Under Qualified Plans
4
Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
5
Internal Revenue Service. Your 403(b) Plan Doesn’t Limit the Total Employer and Employee Contributions to Not Exceed the IRC Section 415(c) Limits
6
Internal Revenue Service. Treasury, IRS Issue Final Regulations on New Roth Catch-Up Rule, Other SECURE 2.0 Act Provisions
7
Office of the Law Revision Counsel. 26 USC 414 – Definitions and Special Rules
8
Office of the Law Revision Counsel. 26 U.S. Code 415 – Limitations on Benefits and Contribution Under Qualified Plans
9
Internal Revenue Service. Tax Consequences of Plan Disqualification
10
U.S. Department of Labor. Retirement Plan Correction Programs
11
Internal Revenue Service. Fixing Common Plan Mistakes – Failure to Limit Contributions for a Participant