The Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2021.
Technical guidance detailing these items are in Notice 2020-79.
The following table details the plan contribution limits by year for your convenience
Other limits included in IRS Notice 2020-79 include:
- The limitation on the annual benefit under a defined benefit (DB) plan under § 415(b)(1)(A) remains unchanged at $230,000.
- The limitation for defined contribution (DC) plans under § 415(c)(1)(A) is increased in 2021 from $57,000 to $58,000.
- The annual compensation limit under §§ 401(a)(17), 404(l), 408(k)(3)(C), and408(k)(6)(D)(ii) is increased from $285,000 to $290,000.
- The dollar limitation under § 416(i)(1)(A)(i) concerning the definition of “key employee” in a top-heavy plan remains unchanged at $185,000.
- The limitation used in the definition of “highly compensated employee” under§ 414(q)(1)(B) remains unchanged at $130,000.