R.J.L. Pension Services, Inc.

With the release of the September Consumer Price Index, the IRS has announced cost-of-living adjustments applicable to dollar limitations for pension plans and other items. Many of the limits applicable to qualified and other employer-sponsored retirement plans, however, were statutorily set for the year by provisions included in the 2001 Economic Growth and Tax Relief Reconciliation Act (EGTRRA).

Effective January 1st

  2019 2018 2017 2015/2016 2014 2013 2012

Annual Compensation Limit:(5)

$280,000 $275,000 $270,000 $265,000 $260,000 $255,000 $250,000
Limits on Defined Contribution Plan:(2) $56,000 $55,000 $54,000 $53,000 $52,000 $51,000 $50,000
Limits on Defined Benefit Plan:(1) $225,000 $220,000 $215,000 $210,000 $210,000 $205,000 $200,000
401(k) 403(b) Elective Deferral Limit:(3) $19,000 $18,500 $18,000 $18,000 $17,500 $17,500 $17,000
401(k) / 403(b)/457 Catch-Up Deferral Limit:(4) $6,000 $6,000 $6,000 $6,000 $5,500 $5,500 $5,500
"Highly Compensated" Employee (HCE) Limit:(6) $125,000 $120,000 $120,000 $120,000 $115,000 $115,000 $115,000
"Key Employee" Officer Compensation: $180,000 $175,000 $175,000 $170,000 $170,000 $165,000 $165,000
Social Security Wage Base: $132,900 $128,400 $127,200 $118,500 $117,000 $113,700 $110,100
457 Deferral Limits:(3) $19,000 $18,500 $18,000 $18,000 $17,500 $17,500 $17,500

Because many of the limits change for 2019, Retirement plan sponsors should immediately prepare to make systems changes to accommodate the new limits. Communication materials that specify the various plan limits should be reviewed for accuracy and revised, if necessary, before they are distributed to plan participants.

Plan Sponsors of defined benefit or defined contribution plans that have received favorable determination letters should not request new determination letters solely because of yearly amendments to adjust maximum limitations in the plans.

For further assistance on applying the 2019 retirement plan limits or to discuss related issues, please contact R.J.L. Pension Services, Inc.

Legend:

  • 1 EGTRRA provides the lesser of $160,000, with Cost of Living Adjustment (COLA) increase, if any, in $5,000 increments after 2002 or 100% of the employee’s average compensation for his high 3 years.
  • 2 EGTRRA provides the lesser of $40,000 with COLA increase, if any, in $1,000 increments after 2002 or 100% of employee compensation. NOTE: 1. The 100% is reduced to 25% for SEPs by the contribution limitations of IRC §402(h)(2)(A), and 2. SIMPLEs are not subject to IRC §415.
  • 3 Increasing by $1,000 each year in 2004-6; thereafter, COLA increase, if any, in $500 increments.
  • 4 Increasing by $1,000 each year in 2004-6; thereafter, COLA increase, if any, in $500 increments.
  • 5 COLA increase, if any, in $5,000 increments after 2002.
  • 6 $120,000 is 2018 Comp for HCE’s in 2019, $125,000 is 2019 Comp for HCE’s in 2020