New IRS Plan Limits Announced for 2015
On October 23, 2014, the IRS released the new plan limits for 2015. The following is a brief summary of the changes in retirement plan limits:
- Salary deferral contributions have been increased from $17,500 to $18,000. This salary deferral limit applies to 401(k), 403(b), and eligible 457(b) plans.
- Catch-up contribution limits for those age 50 and over has been increased from $5,500 to $6,000. This limit also applies to 401(k), 403(b), and eligible 457(b) plans.
- The total contribution limit for defined contribution plans in 2015 has been increased from $52,000 to $53,000. Note, the limit on contributions is the lesser of 100% of compensation or $53,000 for a defined contribution plan in 2015.
- The annual compensation limit has been increased from $260,000 to $265,000. Note, this means that any compensation paid over and above $265,000 may not be taken into account in calculating contributions to a defined contribution plan.
- The dollar limit for the definition of key employee in a top-heavy plan is unchanged at $170,000.
- The definition of HCE (highly compensated employee) has been increased from $115,000 to $120,000.
- The limit on the annual benefit under a defined benefit pension plan remains unchanged at $210,000 for 2015.
- The annual limit on contributions to an IRA remains unchanged at $5,500 and the catch-up contribution for those 50 and over stays at $1,000.
- The taxable wage base is increasing from $117,000 to $118,500 by the Social Security Administration for 2015.
These are just a few of the changes in plan limits (or lack of changes) for 2015. If you have any questions or need any additional information on other adjustments for 2015, please do not hesitate to give us a call.