Compensation & BenefitsPublications

IRS issues limits for 2016 retirements plans

October 27, 2015Articles

On October 21, 2015, the Internal Revenue Service issued IR-2015-118, which applies cost of living adjustments (“COLAs”) to various limits applicable to qualified retirement plans and individual retirement accounts for the 2016 year. In general, the pension plan limitations will not change for 2016 because the increase in the cost-of-living index did not meet the statutory thresholds that trigger their adjustment. Below is a comparison of selected limits for plan years 2014, 2015, and 2016.

2014

2015

2016

Annual compensation for plan purposes

(for plan years beginning in calendar year) 401(a)(17)

$260,000

$265,000

$265,000

Defined benefit plan

(for limitation years ending in calendar year) 415(b) annual benefit limit

$210,000

$210,000

$210,000

Defined contribution plan

(for limitation years ending in calendar year) 415(c) 401(k) / 403(b), aggregate elective deferrals and employer contributions

$52,000

$53,000

$53,000

(for taxable years beginning in calendar year) 402(g) 401(k) / 403(b), elective deferrals

$17,500

$18,000

$18,000

(for taxable years beginning in calendar year) 457 aggregate elective deferrals and employer contributions

$17,500

$18,000

$18,000

(for taxable years beginning in calendar year) 414(v) 401(k) / 403(b) / 457, catch-up deferrals at Age 50+

$5,500

$6,000

$6,000

SIMPLE plan

(for calendar years) 408(p) elective deferrals

$12,000

$12,500

$12,500

(for taxable years beginning in calendar year) 408(p) catch-up deferrals at Age 50+

$2,500

$3,000

$3,000

Individual Retirement Account

(for calendar years) 408(a) contribution limit

$5,500

$5,500

$5,500

(for calendar years) catch-up contribution at Age 50+ (not subject to COLAs)

$1,000

$1,000

$1,000

FICA Wage Base

$117,000

$118,500

$118,500

Highly Compensated Employee 414(q)

$115,000

$120,000

$120,000

Key Employee Officer for top-heavy testing

$170,000

$170,000

$170,000

ESOP 5-Year Distribution period 409(o)(1)(c)(ii)

$1,050,000

$1,070,000

$1,070,000

For a more detailed analysis of how the IRS notice may impact your retirement plan, contact one of our experienced Employee Benefits attorneys.