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Table of Annual Limits

LIMITATION202020192018
Elective Deferrals §§401(k)/403(b), §402(g)(1) 19,500 19,000 18,500
Elective Deferrals §457(b) Plan 19,500 19,000 18,500
Special Catch-Up §§457(e)(15), 457(b)(3) 39,000 38,000 37,000
Age 50+ Catch-Up §414(v)(2)(B)(i) 6,500 6,000 6,000
Defined Contribution Plans §415(c)(1)(A) 57,000 56,000 55,000
Defined Benefit Plan Limit §415(b)(1)(A) 230,000 225,000 220,000
Annual Compensation Limit §401(a)(17) 285,000 280,000 275,000
Highly Compensated Employee §414(q)(1)(B) 130,000 125,000 120,000
SIMPLE Maximum Contribution §408(p)(2)(E) 13,500 13,000 12,500
Age 50+ SIMPLE Catch-Up §414(v)(2)(B)(ii) 3,000 3,000 3,000
Key Employees §416(i)(1)(A)(i) 185,000 180,000 175,000
IRA/Roth Contribution Limit §219(b)(5)(A) 6,000 6,000 5,500
IRA/Roth Catch-Up Limit §219(b)(5)(B) 1,000 1,000 1,000

Important Dates

Retirement Plan Comparison Chart

SEPSimple IRA401(k)Safe Harbor 401(k)
Company Size Limit Any size group 100 or fewer employees including union Any size group Any size group
Eligibility Requirements Earn over $600 (2020) per year in 3 of the last 5 years, age 21, may include union Earns $5,000 in any prior 2 years and is expected to earn $5,000 in current year. No 1,000 hour requirement. No age requirement. May exclude union. Age requirements cannot exceed 21. Service requirements cannot exceed 1 year of service, 1,000 hours/1 year Age requirements cannot exceed 21. Service requirements cannot exceed 1 year of service, 1,000 hours/1 year
Required Employer Contribution Optional, complete flexibility Mandatory. Employer must match 100% up to 3% of the employee’s compensation or make a non-elective contribution of 2% of pay for each eligible employee. (Elect at least 60 days prior to beginning of calendar year). Under the matching formula, the employer is permitted with proper notice to reduce the match to as low as 1% in 2 of every 5 years. Optional. Complete flexibility in Match & Voluntary Contribution as long as tests are met. Choice of a 3% profit sharing or a match consisting of 100% match on the first 3% of deferrals and 50% match on the next 2%. Both must be 100% vested with no last day or 1,000 hour requirement.
Maximum Employee Deferral N/A $13,500 (2020) plus $3,000 catch up (age 50) $19,500 (2020) plus $6,500 catch up (age 50) $19,500 (2020) plus $6,500 catch up (age 50)
Maximum Match None permitted $13,500 (2020) N/A N/A
Compensation Limits $285,000 (2020) No limit for deferrals or match, $285,000 (2020) for 2% non-elective contribution $285,000 (2020) $285,000 (2020)
% (of Compensation) Limit for Deferral N/A 100% 100% 100%
Section 415 $57,000 (2020) $57,000 (2020) $63,500 with catch-up $57,000 (2020) $63,500 with catch-up $57,000 (2020) $63,500 with catch-up
Discrimination & Top Heavy Testing Required Top heavy- Yes None Yes Deemed to pass 401(k) test & top heavy requirement
Vesting – Profit Sharing None permitted None permitted 5 year cliff/6 year graded Same as 401(k) except the safe-harbor contribution must be 100% immediate
Vesting – Match None permitted None permitted 3 year cliff/6 year graded Same as 401(k) except the safe-harbor contribution must be 100% immediate
IRS Filing None None 5500 filing 5500 filing
Establishment Date Tax filing date Between January 1 and October 1 Last day of Plan Year Between January 1 and October 1
Calendar Plan Year Probably Not Required Required Not Required Not Required
Available to Tax Exempt Entities Yes Yes Yes Yes
Available to Government Entities Yes No Yes Yes
Hardship Withdrawals Not available Not available Available Available
Maximum Deduction Limit Discretionary—cannot exceed lesser of 25% of employee’s compensation or $57,000 25% of total compensation plus deferrals. Individual participants may receive 100% of compensation up to $57,000 25% of total compensation plus deferrals. Individual participants may receive 100% of compensation up to $57,000 25% of total compensation plus deferrals. Individual participants may receive 100% of compensation up to $57,000
Plan Summary Required Yes Yes Yes Yes
Eligibility for Employer Contribution All eligible employees receive employer contribution All eligible employees receive employer contribution Employees separated prior to year end can be excluded. 1,000 hour rule available Same as 401(k) except all participants must receive safe-harbor contribution
Premature Distributions Follows qualified plan rules (10% penalty) Follows qualified plan rules (10% penalty) Follows qualified plan rules (10% penalty) Follows qualified plan rules (10% penalty)
Rollovers Roll in or out to IRA or QRP Roll out to Qualified plans. IRA only after two years of participation Yes, except to SIMPLE Yes, except to SIMPLE
Control of Account Employee Employee Employer/Employee Employer/Employee
Loans Not available Not available Available Available
Individual Trustee Allowed No No Yes Yes
Start-up Credit N/A N/A 50% of start up costs, up to the greater of $500 or $250/NHC participant up to $5,000 for the first three years 50% of start up costs, up to the greater of $500 or $250/NHC participant up to $5,000 for the first three years
Tax Credit for Low Income Participants N/A N/A 50% tax credit for contributions up to $1,000 ind./$2,000 jt. Max phase out amount: $39,000 single $65,000 joint $48,750 Head of HH 50% tax credit for contributions up to $1,000 ind./$2,000 jt. Max phase out amount: $39,000 single $65,000 joint $48,750 Head of HH