The IRS recently announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2016. For the third time in six years, most of the limitations were unchanged because the increase in the Consumer Price Index did not meet the statutory thresholds for their adjustment:
- 401k Elective Deferrals: $18,000
- Annual Defined Contribution Limit: $53,000
- Annual Compensation Limit: $265,000
- Catch-Up Contribution Limit: $6,000
- Highly Compensated Employees: $120,000
- Annual Defined Benefit Limit: $210,000
- 403(b)/457 Elective Deferrals: $18,000
- SIMPLE Employee Deferrals: $12,500
- SIMPLE Catch-Up Deferral: $3,000
- SEP Minimum Compensation: $600
- SEP Annual Compensation Limit: $265,000
- Social Security Wage Base: $118,500
However, other limitations will change because the increase in the index did meet the statutory thresholds. All of which are indicated on the 2016 Plan Limits Chart.