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.
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
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.
* IR-2015-118, Oct. 21, 2015.;-401(k)-Contribution-Limit-Remains-Unchanged-at-$18,000-for-2016
SSN #102815-10
PCI’s archived blog entries are dated, the rules and statutes referenced may have changed. The analysis or guidance within these blog entries may have become stale, dated, or no longer accurate. PCI will not update or change these entries to reflect the latest analysis or development.


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