The Puerto Rico Treasury Department recently issued Circular Letter 25-01 (Spanish version) announcing the 2025 benefit limits for defined benefit (DB) and defined contribution (DC) retirement plans qualified under the Puerto Rico tax code. These limits restrict the contributions made to, and benefits paid from, these plans as well as the compensation that can be taken into account for qualified retirement plan purposes.
Plan sponsors of dual-qualified plans and plans qualified solely in Puerto Rico should update their administrative processes and systems to reflect the 2025 limits. These sponsors should also review their administrative procedures to ensure limits are being monitored.
The qualified retirement plan limits are effective for the taxable year beginning on or after January 1, 2025. The key limits are shown in the chart below.
| Puerto Rico qualified plan limits | 2024 | 2025 |
|---|---|---|
| Maximum recognizable compensation | $345,000 | $350,000 |
| Highly compensated employee | $155,000 | $160,000 |
| Annual benefit limit (DB) | $275,000 | $280,000 |
| Annual contribution limit (DC) | $69,000 | $70,000 |
| Limit on pre-tax elective deferrals | ||
| Qualified only in Puerto Rico | ||
| - Contribution limit | $15,000 | $15,000 |
| - Catch-up contribution limit (age 50 or older) | $1,500 | $1,500 |
| Dual-qualified in Puerto Rico and U.S. | ||
| - Contribution limit* | $20,000 | $20,000 |
| - Catch-up contribution limit (age 50 or older) | $1,500 | $1,500 |
| Limit on after-tax contributions: 10% of the participant’s maximum recognizable compensation for all the years of participation in the retirement plan | ||
