Spring 2025 and last year's pension contribution

March is a rational month to fund a 2024 pension contribution and a poor month to invent one. The tax return is coming into focus. Cash from last year's collections may finally be visible. The enrolled actuary can value a year that has actually ended, with compensation that is no longer an estimate. None of that converts a round number into a deductible contribution. The 2024 deposit, if there is to be one, is the deposit the valuation supports and the CPA can place on the 2024 return. The 2025 limits, which are now in force for 2025, do not reach backward to enlarge it.

Sterling Pension Group LLC in West Hartford is a third-party administrator. We coordinate independent Enrolled Actuaries. We are not an actuarial firm, and we do not decide what your return may deduct. This briefing is education for a self-employed owner, a physician, a dentist, an attorney, or a consultant who still has a 2024 defined benefit year open. It is not tax, legal, or actuarial advice. The warning against a holiday guess still applies if the guess was merely postponed: /insights/do-not-rush-funding. The December map of the clocks is /insights/december-timing.

Two dates, and they are not the same date

Write them on separate lines.

Minimum funding for a calendar-year defined benefit plan, cash balance plans included, is generally due 8.5 months after year-end. For the 2024 year that date is September 15, 2025. If the minimum is not met, the excise tax reported on Form 5330 can be 10% of the shortfall. September 15 is not optional because you extended your return, and it is not optional because you already deposited something in March that turned out to be short of the minimum the final valuation required. Put a reminder in the practice calendar now, while March still feels early. Owners miss this date by treating it as a duplicate of the tax deadline. It is not a duplicate.

The deduction date is the second line. IRC 404(a)(6) generally provides that a contribution paid after the close of the taxable year, and on or before the due date of the return including extensions, may be deemed paid on the last day of that taxable year for deduction purposes. The day that sentence produces is a fact about your entity and about whether you extend. A partnership, an S corporation, a C corporation, and a sole proprietor do not share one national due date in every case, and an extension changes the window. Your CPA has to name the day. Do not let a banker, a payroll company, or this briefing equate that day with September 15. A contribution can be timely for minimum funding and late for the deduction you wanted, or timely for an extended deduction and still need to satisfy a minimum that was already due, depending on the year and the facts. Ask the question in words: "If we deposit on this day, which plan year is funded, and which return can deduct it?"

Quarterly installments are a third, narrower clock. Some existing defined benefit plans owe them because the prior Schedule SB said so. Many small, well-funded owner plans do not. Do not invent a quarterly schedule from a blog, and do not ignore one that is already on your valuation. If you are unsure, the actuary's last certification is the document to read, not a spring estimate of "what feels current."

The 2024 column is the column that prices last year

A 2024 accrual is measured under 2024 limits, from Notice 2023-75. The deferral limit was $23,000. The age-50 catch-up was $7,500. There was no ages 60–63 catch-up. The defined contribution annual additions limit was $69,000. The compensation cap was $345,000. The defined benefit annual benefit limit was $275,000. The IRA limit was $7,000. If a 2024 paycheck deferred more than $23,000, or used a catch-up the person was not eligible to use, that is a 2024 excess to correct, not a head start on 2025.

The 2025 column is in force for 2025 and only for 2025. Deferral $23,500. Age-50 catch-up $7,500. Ages 60–63 catch-up $11,250. Annual additions $70,000. Compensation cap $350,000. Defined benefit limit $280,000. IRA $7,000. IR-2024-285 is the announcement: 2025 limits. The table that holds both years is the COLA page. How the new column behaves now that it is live is /insights/limits-in-force.

Do not ask the actuary to "update" the 2024 cash balance credit because the benefit limit is now $280,000. The 2024 benefit limit remains $275,000. A higher ceiling in a later year is not retroactive found money. The difference between those two benefit limits is not a contribution increase you may deposit in March as a true-up. The IRS describes the benefit limit, which is not itself a deposit, on this page: defined benefit plan benefit limits.

Any owner contribution figure that has not been through that valuation is illustrative. A range you liked in October is illustrative. A neighborhood based on age is illustrative. The illustrations and the calculator are illustrative. Spring does not promote them. The limits page is where the statutory figures stay, apart from those teaching numbers.

What the actuary needs now that the year is over

The census can finally be final. Names, dates of birth, dates of hire and termination, hours, and compensation the plan's definition counts, for every related employer. W-2s that are still drafts should be marked as drafts. Earned income for a sole proprietor or partner is the CPA's computation, and it is often not finished in the first week of March. Tell the actuary that, rather than substituting draws. Compensation above $345,000 was not countable for 2024 plan purposes even if the W-2 is higher. Compensation you wish you had paid is not compensation.

Assets in the trust, if the trust existed, need a year-end statement. Contributions already deposited and labeled, correctly or incorrectly, as 2024 funding need to be on that statement. A transfer you made in December without a valuation is not something to hide until the return is filed. It is the first fact the actuary should see, because it may be too much, too little, or in the wrong trust.

The formula is the document's formula, not the formula you now prefer. If no document was adopted, say that plainly. The SECURE Act generally still allows a new plan for a prior year to be adopted by the filing deadline, including extensions. That possibility is not a suggestion to begin design the week the return is due, and it does not recreate employee deferrals. If 2024 wages were paid without a deferral election, the $23,000 and any $7,500 catch-up are gone. A pension-only adoption, if counsel and the actuary say the timing still works, might remain a conversation. It is a compressed conversation. It is not comfortable, and it is not a reason to wire a placeholder while the document is blank. The case for having started in September was /insights/year-end-window. The consequence of not having a census is /insights/census-first.

How your CPA and the actuary should divide the spring

Ask the enrolled actuary for the minimum required contribution for the 2024 year and for the range that might be deductible, given the formula and the assets. Ask your CPA which point in that range the 2024 return can use, and by which date the deposit has to clear to be on that return. Sterling can coordinate the census, the trust records, and the Form 5500 path so both professionals are looking at one set of facts. We do not sign Schedule SB. We do not sign the return. If the two professionals disagree, do not resolve the disagreement by averaging their numbers and wiring the average. Resolve it by making them look at the same document and the same compensation.

Employer profit-sharing contributions for 2024, if you also maintain a 401(k), still have to be classified correctly. Elective deferrals are not the same deduction animal as employer money. A combo plan's coordination rule can limit how those pieces sit together. The structural reason you may have both plans is /insights/combo-plan and the combo page. Spring is a bad time to reclassify a deferral as profit sharing, or a pension deposit as profit sharing, because the bank memo was vague. Label the wire when it happens: plan name, plan year, and whether it is employee deferral, employer defined contribution, or defined benefit funding. Your CPA should be able to read the label without a phone call.

Filings that belong on the spring list, not on the spring wire

The 2024 Form 5500 for a calendar-year plan is generally due July 31, 2025. Form 5558 generally extends that to October 15, 2025. The filing is made on EFAST2. Form 5558 can be e-filed, which has been true since January 1, 2025. None of those sentences requires you to file in March. They require you not to be surprised in July. An extension is appropriate when the valuation or the audit, if an audit applies, is honestly unfinished. An extension is not a strategy to avoid discovering that the census was wrong. The IRS collects the regime in the Form 5500 corner. The Department of Labor's page is Form 5500 reporting and filing. Schedule SB, certified by the enrolled actuary, is part of that filing for a defined benefit plan. A deposit with no path to a certified schedule is an incomplete project.

PBGC coverage, if it applies, has its own premium calendar, separate from Form 5500 and separate from the deduction. Coverage is plan-specific. Many small professional-service employers are exempt. It is not true that all small plans are exempt, and a spring contribution does not settle the question. If you do not know the answer for this employer, ask counsel before you describe the plan to a buyer, a bank, or a new partner. The starting page is PBGC coverage. Physicians and dentists should not assume the professional label finishes the analysis; the census notes are /insights/physicians and /insights/dentists.

Publication 560 remains useful if a bookkeeper is about to book the entire wire as a payroll expense or as an owner draw. It is a pension contribution only if it is a pension contribution. The plan lifecycle describes the reporting that follows a real deposit. The fees for the valuation and the filing belong in the same budget as the contribution. A deduction that only "works" if those fees are ignored is smaller than it looks.

Roth catch-up and other 2025 topics that do not price the 2024 wire

Notice 2023-62 delayed the SECURE 2.0 Roth catch-up mandate through 2025. It is not in force this spring. It does not change the character of a 2024 cash balance contribution, and it does not change a 2024 deferral that was properly made as pre-tax or as an elective Roth if the plan allowed the choice. The operational mandate is scheduled to begin January 1, 2026, for participants whose prior-year FICA wages exceeded $150,000, inside the 401(k). Leave it out of the 2024 funding file. Also leave out the ages 60–63 catch-up of $11,250. That tier did not exist for 2024. Using it to explain a larger employer deposit is a category error on top of a year error.

2025 design work can proceed in parallel if the practice wants a 2025 accrual. It should proceed on 2025 limits, with a 2025 census, and it should not be funded with the same unlabeled wire as the 2024 minimum. Two plan years, two valuations, two labels. Owners who try to "do both years at once" in a single March transfer are the owners who spend the summer unreimbursing a trust. If 2025 is the first year you will sponsor anything, and 2024 deferrals were never withheld, be candid about that. You may still have an adoption window for a prior-year pension, and you may have a clean 2025 deferral year in front of you. They are different projects. The self-employed and cash balance pages describe the instrument. They do not collapse the years.

What not to do because cash happens to be available

Do not gross the deposit up to the $275,000 benefit limit because the operating account can stand it. That limit is not a contribution. Do not gross it up to $69,000 plus an illustrative pension credit copied from a colleague of a similar age. The colleague's census is not yours. Do not skip the deposit entirely if a plan already exists and the actuary has already told you a minimum was due on a schedule you missed. Catching up a known minimum is compliance. Inventing a new maximum is not.

Do not change the formula in March to match a deposit you already made in December. Amendments have effective-date rules. An actuary can tell you whether an amendment is even available. A bookkeeper cannot. If the December wire and the formula disagree, the professional conversation is about correction, not about a narrative that makes them agree.

Owners who conclude, with the final census in hand, that the staff cost or the required minimum is unacceptable need a different conversation: whether a plan that was adopted can be frozen or terminated properly, or whether a plan that was only contemplated should stay unadopted. That is /insights/not-a-fit and the not a fit page. It is a better March outcome than a heroic deposit the practice cannot repeat. Minimum funding is a repeating idea. One generous spring does not retire the next September 15.

What to do in the next two weeks

Make the 2024 file specific, then move money only against that file.

• Ask the enrolled actuary for the 2024 minimum and the deductible range, using final or near-final compensation and the $275,000 benefit limit. Do not accept a figure that cites $280,000 for the 2024 year.
• Ask your CPA, in the same week, whether a deposit on the date you have in mind is deductible on the 2024 return, and whether an extension is actually filed or only intended. Keep September 15, 2025 on the minimum-funding line regardless.
• List every amount already sent to any trust since last January and label what you thought it was. Send that list to both professionals before you send more money.
• If no document exists, stop the wire. Ask whether a 2024 adoption is still realistically available, and accept the answer if deferrals are already lost.
• Schedule the Form 5500 path for summer: due July 31, 2025, or October 15, 2025 if Form 5558 is filed, on EFAST2.

When the minimum and the deduction date are both written down, contact Sterling Pension Group if you want the trust deposit, the census, and the filing coordinated with the actuary and your CPA. Bring the 2024 column. Leave the 2025 benefit limit in the 2025 folder, where it belongs.