2018 Pension Plan Limits
Effective January 2018, the Cost of Living Adjustments for Benefits and Contributions to Qualified Retirement Plans is required under Internal Revenue Code 415(d).
Table of Contents
Table of Contents
Background on the Plan:
Effective January 2018, the Cost of Living Adjustments for Benefits and Contributions to Qualified Retirement Plans is required under Internal Revenue Code 415(d).
The following adjustments have been made:
- The annual limit on the amount of compensation that can be "taken into account" under section 401(a)(17) pertaining to 401(k) plans increased by $5,000 from $270,000 to $275,000. The limitation under Section 402(g)(1) on the exclusion for elective deferrals described in Section 402(g)(3), which applies to 401(k) and 403(b) plans increased by $500 from $18,000 to $18,500
- The limitation on deferrals under Section 457(e)(15), which applies to deferred compensation plans of state and local governments and tax-exempt organizations (457 plans) increased by $500 from $18,000 to $18,500.
- The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts remains unchanged at $12,500.
- The catch-up deferral limit applicable to SIMPLE plan participants who are 50 and older remains unchanged at $3,000.
- The catch-up deferral limit applicable to other defined contribution plans, for participants who are 50 and older, including 401(k) plan participants remains unchanged at $6,000.
- The limitation used in the definition of a highly compensated employee under Section 414(q)(1)(B) remains unchanged at $120,000.
- The limitation for defined contribution plans under Section 415(c)(1)(A) is increased by $1,000 from $54,000 to $55,000 for 2018 (Annual Addition).
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