OUR THOUGHTS ON:

2017 Pension Plan Limitations

401(k) Plans|Audit|ERISA

By Jenna Zelenski

The Internal Revenue Service (IRS) announced cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for the 2017 tax year.  Highlights of limitations that changed for 2017 include a $1,000 increase in the phase-out range for single taxpayers covered by a workplace retirement plan from $61,000-$71,000 to $62,000-$72,000, and a $2,000 increase to the phase-out range for IRA contributors who are not covered by a workplace retirement plan and are married to someone who is covered from $184,000-$194,000 to $186,000-$196,000.  The phase-out range for singles and heads of households making contributions to a Roth IRA was also increased by $1,000 from $117,000-$132,000 to $118,000-$133,000.  Other limitations that were changed for 2017 include a $1,000 increase in the maximum total annual contributions limit for defined contribution plans from $53,000 to $54,000, a $5,000 increase in the compensation dollar limit used to determine key employees in a top-heavy plan from $170,000 to $175,000, and a $5,000 increase in the maximum annual compensation limit from $265,000 to $270,000.

On the other hand, the limitations listed below did not change after taking into account the applicable rounding rules. 

2017 Pension Plan Limits that Remain Unchanged from 2016

  Annual salary deferrals for 401(k) and 403(b) plans

 $18,000

  Age 50 catch-up contributions

 $6,000

  Traditional and Roth IRA contributions

 $5,500

  Traditional and Roth IRA catch-up contributions

 $1,000

  SIMPLE 401(k) contribution limit

 $12,500

  Compensation threshold for highly compensated employees “HCE” 

 $120,000

 

If you have any questions on pension plan limitations, please contact us and visit our Employee Benefit Plan services page to learn about our ERISA services.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

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