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One of the most common compliance issues for employers and plan sponsors is failure to adhere to annual retirement plan limits. In order to avoid costly penalties and administratively burdensome correction procedures, plan sponsors must remain up-to-date with respect to applicable retirement plan limits. Today, October 21, 2015, the IRS announced cost-of-living adjustments (COLA) affecting 2016 dollar limitations for retirement plans and other retirement-related items.
In general, the 2016 limits remain unchanged from the retirement plan limits applicable to 2015. Below is a chart listing retirement plan (401(k) and non-401(k) plan) limits for the 2013-2016 plan years. Please note that the chart below does not include all applicable retirement plan limits, just some of the common ones.
|
401k Plan Limits |
||||
|
|
2016 |
2015 |
2014 |
2013 |
|
Elective Deferrals |
$18,000 |
$18,000 |
$17,500 |
$17,500 |
|
Catch-Up Contributions |
$6,000 |
$6,000 |
$5,500 |
$5,500 |
|
Annual Defined Contribution Limit |
$53,000 |
$53,000 |
$52,000 |
$51,000 |
|
Annual Compensation Limit |
$265,000 |
$265,000 |
$260,000 |
$255,000 |
|
Highly Compensated Employee |
$120,000 |
$120,000 |
$115,000 |
$115,000 |
|
Non-401k Related Limits |
||||
|
Defined Benefit Plans |
$210,000 |
$210,000 |
$210,000 |
$205,000 |
|
403(b)/457 Elective Deferrals |
$18,000 |
$18,000 |
$17,500 |
$17,500 |
|
IRAs for individuals age 49 and below |
$5,500 |
$5,500 |
$5,500 |
$5,500 |
|
IRAs for individuals age 50 and above |
$6,500 |
$6,500 |
$6,500 |
$6,500 |
|
SIMPLE Employee Deferrals |
$12,500 |
$12,500 |
$12,000 |
$12,000 |
|
SEP Annual Compensation Limit |
$265,000 |
$265,000 |
$260,000 |
$255,000 |
|
Social Security Wage Base |
$118,500 |
$118,500 |
$117,000 |
$113,700 |
Courtesy: Anne Tyler Hall
Smith and Howard’s Employee Benefit Plan Audit Practice was recently named one of the Top Employee Benefits and Compensation Companies by the Atlanta Business Chronicle. Our team of dedicated benefit plan audit professionals provides EBP audit services to private and public companies throughout the state. Contact Sean Spitzer or Lori Wagnon for more information at 404-874-6244.
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