The Internal Revenue Service has recently announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for Tax Year 2015. The pension plan limitations will increase slightly for 2015 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment.
The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan increases to $18,000.
The catch-up contribution limit for those aged 50 and over increases to $6,000.
The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $260,000 to $265,000.
The limitation used in the definition of highly compensated employee under Section 414(q)(1)(B) will increase to $120,000.
The limitation for defined contribution plans under Section 415(c)(1)(A) is increased in 2015 from $52,000 to $53,000.
The dollar limitation under Section 416(i)(1)(A)(i) concerning the definition of key employee in a top-heavy plan remains the same at $170,000.
The Social Security Wage Base is increased from $117,000 to $118,500.