My income changed, can I update the annual contribution?
Yes. First, I recommend that you see the Plan Document section entitled “Amendment” that would specify the Plan Sponsor can amend the Plan. As Mike pointed out, It is important to consult with the Plan’s Actuary to see if the change you have in mind can be done as of the effective date desired in terms of proper timing, cost for the change, participant benefit rights, etc. Generally amendment cannot be done retroactively so be prepared to plan ahead!
If your income changed, your contribution should also change. Defined benefit plans are very complicated, adn the use of pension actuaries would be typical. You should have a TPA (Third Party Administrator) that manages the tax and legal issues associated with your plan, and within the fees they are already charging, they should be responible to advise you of your new contribution amount. Should the new contribution not be managable, they should also advise you on what amendments can be made to the plan to alter the required contribution, or how to freeze contributions altogether.
Juanita: You may amend the DB Plan, but you'll likely need some actuarial assistance. David is correct. Most TPA's/Record keepers have actuaries to assist you, although you may run into a couple billable hrs if you are trying to modify your formula to permit more/less contributions in a given year.