Contributions to retirement savings plans are subject to calendar year limits under federal tax laws.
Summary of 2016 Contribution Limits
| Stanford Contributory Retirement Plan (SCRP) Before-Tax * | $18,000 |
| Age 50 and over Catch-Up Limit Before-Tax* | $6,000 |
| Compensation Limit | $265,000 |
| Social Security Wage Base | $118,500 |
| IRA Limit | $5,500 |
| IRA Age 50 and over Catch-Up Limit | $1,000 |
*Maximum you may contribute to TDA and CRA accounts and other non-Stanford plans combined.
Additional Information on Limits
Contributions to retirement savings plans are subject to many calendar year limits under the Federal Internal Revenue Code (IRC). These limits include an annual:
- Before-tax contribution limit
- Total contribution limit
- Annual compensation limit
- Non-discrimination limit
These limits apply to contributions made to both the Tax-Deferred Account (TDA) and the Contributory Retirement Account (CRA) of the Stanford Contributory Retirement Plan (SCRP). Therefore, you can reach the calendar year limits several ways based on your:
- TDA contributions alone
- CRA contributions alone
- A combination of TDA and CRA contributions, or
- Contributions to Stanford plans plus contributions to any other non-Stanford plans.
Important
Stanford reserves the right to stop or reduce contributions due to IRS limits, if Stanford notices that a limit has been reached. You are responsible for ensuring that your annual contributions do not exceed IRS limits. You are also responsible for monitoring your limits and paying any taxes, penalties or interest due as a result of excess contributions. If you have questions, you can contact the University HR Service Team or a tax advisor.
Annual Limit on Before-Tax Contributions
For 2016, the IRS limit on before-tax contributions is $18,000 if you are under age 50 and $24,000 if you are age 50 or older. This before-tax limit may be adjusted each year by the IRS.
The annual limit applies to before-tax employee contributions to any employer’s savings plan under IRC Sections 403(b) and 401(k). It does not apply to after-tax employee contributions.
Catch Up Contributions
If you are a plan participant, have worked at Stanford for 15 years or more, and have not maximized your prior annual contributions, you may be able to increase the annual limit by as much as $3,000 for up to five years. To see if you qualify for this special 15-year catch up:
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Contact the University HR Service Team for general information and request a special 15-year catch-up calculation.
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The university will not allow you to contribute to this 15-year catch up without a catch-up limits calculation provided by Stanford Benefits.
If you worked for any other employer during the year, you are responsible for monitoring the annual limit.
Total Contribution Limit
For 2016, the calendar-year limit on total contributions is the lesser of 100 percent of your compensation or $53,000. This total contribution limit may be adjusted each year by the IRS. This total contribution limit applies to the sum of:
Employee contributions to both the TDA and CRA accounts of the SCRP plan, except for the extra $6,000 that employees age 50 or older may contribute on a before-tax basis, and Stanford matching and basic contributions to the SCRP.
Note: The total contribution limit also applies to any contributions you make to another tax-deferred annuity plan, a Keogh plan, or a qualified plan of an employer you control, such as a business you own.
Annual Compensation Limit
The IRS limits the maximum annual compensation on which qualified retirement benefits can be calculated. For 2016, the maximum annual compensation is $265,000 of plan-eligible earnings. This annual compensation limit may be adjusted each year by the IRS.
If contributions stop because you reached the limit, they will automatically restart at the beginning of the next calendar year, as long as you are an eligible employee.
Non-Discrimination Limit
In accordance with IRS requirements, the plan must pass a non-discrimination test each year. This test ensures that after-tax contributions, basic contributions and matching contributions for higher-paid employees (as an average percentage of regular salary) are not substantially more than those for other eligible employees.
If the test is not satisfied, actions will be taken to bring the plan into compliance. For example, basic and matching contributions for highly-paid employees may be reduced. If adjustments are made to pass non-discrimination tests, if you are one of the affected plan participants, you will be notified in writing.
