The Internal Revenue Service announced cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for the 2016 tax year. Highlights of limitations that changed for 2016 include a $1,000 increase to both the phase-out range for IRA contributors who are not covered by a workplace retirement plan and are married to someone who is covered and the range for taxpayers making contributions to a Roth IRA for married couples filing jointly from $183,000-$193,000 to $184,000-$194,000. The phase-out range for singles and heads of household making contributions to a Roth IRA was also increased by $1,000 from $116,00-$131,000 to $117,000-$132,000. On the other hand, the pension plan limitations listed below will not change because the increase in the cost-of-living index did not meet the statutory thresholds that prompt their adjustment.
2016 Pension Plan Limits that Remain Unchanged from 2015
|Annual salary deferrals for 401(k) and 403(b) plans||$18,000|
|Age 50 catch-up contributions||$6,000|
|Maximum total annual contributions||$53,000|
|Maximum annual compensation||$265,000|
|Traditional and Roth IRA contributions||$5,500|
|Traditional and Roth IRA catch-up contributions||$1,000|
|SIMPLE 401(k) and IRA contribution limit||$12,500|
|Compensation dollar limit used to determine key employees in a top-heavy plan||$170,000|
|Compensation threshold for highly compensated employees “HCE”||$120,00|
Contact us for questions regarding the 2016 pension plan dollar limitations and visit our ERISA Industry Group page to learn about services that we can offer in regards to your company's benefit plans.