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IRS Releases Unchanged Retirement Plan Limitations for 2016 Plan Year
Last Updated: October 28, 2015
On October 21, 2015, the Internal Revenue Service announced the 2016 Cost-of-Living Adjustments (COLA)* to the retirement plan limits.
Below is a chart outlining the COLA limits that become effective January 1, 2016, along with the two prior tax years’ limits. As you will see, the 2016 limits are the same as the 2015 limits.
If you have any questions or wish to discuss the application of these limits to your retirement plan, please contact your ERISA Consultant at 417.889.4918 or 800.234-9584.
| PLAN LIMITS | 2014 | 2015 | 2016 |
| Salary Deferral Limit for 401(k), 403(b), 457(b) Plans (Code §402(g)(1)) (generally, a participant’s calendar year limit) | $17,500 | $18,000 | $18,000 |
| Catch-up Limit for 401(k), 403(b), 457(b) Plans (Code §414(v)) (available to participants age 50 or older by December 31) | $5,500 | $6,000 | $6,000 |
| Maximum Annual Compensation for Retirement Plan Purposes (Code §401(a)(17)) | $260,000 | $265,000 | $265,000 |
| Maximum Defined Contribution Plan Annual Addition (Code §415(c)) (effective for limitation years ending in designated year) | $52,000 | $53,000 | $53,000 |
| Social Security Taxable Wage Base | $117,000 | $118,500 | $118,500 |
| Highly Compensated Employee (HCE) Compensation (Code §414(q)) | $115,000 | $120,000 | $120,000 |
| Top-Heavy Key Employee Compensation (Code §416(i)) | $170,000 | $170,000 | $170,000 |
