Updated October 30, 2026. Quick answer: The section 415(b) limit on the annual benefit a defined benefit plan can pay is $290,000 for 2026, up from $280,000 in 2025, per IRS Notice 2025-67. It caps the yearly pension a qualified plan may provide, which is a different thing from the contribution limits for 401(k) plans. The 2027 version has its own page, the defined benefit plan limit for 2027.
The 2026 limit
The Notice states: “Effective January 1, 2026, the limitation on the annual benefit under a defined benefit plan under section 415(b)(1)(A) of the Code is increased from $280,000 to $290,000.”
| Year | Section 415(b) annual benefit limit | Change from prior year | Source |
|---|---|---|---|
| 2025 | $280,000 | Prior-year figure in IRS Notice 2025-67 | |
| 2026 | $290,000 | +$10,000 (computed) | IRS Notice 2025-67 |
The Notice adds a rule for people who have already left: “For a participant who separated from service before January 1, 2026, the participant’s limitation under a defined benefit plan under section 415(b)(1)(B) is computed by multiplying the participant’s compensation limitation, as adjusted through 2025, by 1.0288.”
What section 415(b) says
Under the statute, benefits exceed the limit when “such annual benefit is greater than the lesser of” two amounts: a dollar amount that the statute writes as $160,000, and “100 percent of the participant’s average compensation for his high 3 years.” The $160,000 is the statute’s base amount, and the annual adjustment turns it into the $290,000 above.
The benefit being measured is a particular form of pension: “a benefit payable annually in the form of a straight life annuity (with no ancillary benefits) under a plan to which employees do not contribute”.
How the figure is indexed, and a check
The statute fixes the starting point: “The base period taken into account for purposes of paragraph (1)(A) is the calendar quarter beginning July 1, 2001.” It also sets the rounding: “Any increase under subparagraph (A) of paragraph (1) which is not a multiple of $5,000 shall be rounded to the next lowest multiple of $5,000.”
Check of the 2026 figure, using public inflation data: the BLS CPI-W monthly values were 173.8, 173.8 and 174.8 for July to September 2001 (average 174.133) and 316.349, 317.306 and 318.139 for July to September 2025 (average 317.265), a ratio of 1.82197. $160,000 times 1.82197 is $291,515 (computed), which rounds down to a multiple of $5,000, or $290,000. That matches the Notice. This is our arithmetic on public data, shown to explain the 2026 figure.
A different limit from the 401(k) numbers
The same Notice sets a separate limit on contributions to defined contribution plans: “The limitation for defined contribution plans under section 415(c)(1)(A) is increased in 2026 from $70,000 to $72,000.” The two limits apply to different kinds of plans and should not be swapped. The contribution side is on the total 401(k) contribution limit for 2026, and the pay that a plan may count is on the 401(a)(17) pay limit for 2026.
Common mistakes
- Reading $290,000 as a cap on what an employer can contribute. It is a cap on the annual benefit, measured as a straight life annuity. The contribution-side cap is the separate $72,000 figure in the same Notice.
- Using last year’s $280,000 for 2026. The Notice raised the limit to $290,000.
- Assuming every plan pays up to the limit. The statute’s second item, 100 percent of the participant’s average compensation for his high 3 years, can be lower than the dollar limit.
Related: the total 401(k) contribution limit for 2026, the 401(a)(17) pay limit for 2026, the cash balance plan 10-year phase-in, and the defined benefit plan limit for 2027.
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Answer againSources
- Internal Revenue Service, Notice 2025-67, 2026 limitations for retirement plans and IRAs: www.irs.gov
- 26 U.S.C. 415, Limitations on benefits and contribution under qualified plans (U.S. Code, 2024 edition, U.S. Government Publishing Office): www.govinfo.gov
- Bureau of Labor Statistics, CPI-W, U.S. city average, all items, series CWUR0000SA0 (public data API): api.bls.gov
Read from the primary documents linked above on October 30, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the IRS itself is the right place to confirm anything consequential.