On October 27, 2016, the Internal Revenue Service (IRS) announced cost-of-living adjustments applicable to dollar limitations for pension plans and other items for Tax Year 2017.
Per the IRS Release:
“The Internal Revenue Service today announced cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for Tax Year 2017. The IRS today issued technical guidance detailing these items in Notice 2016-62.”
A summary of the 2017 pension limitations is as follows:
|
Plan Maximum Contribution Limits
|
2016
|
2017
|
|
Section 401(k) Plan or SAR SEP
|
$18,000
|
$18,000
|
|
Section 403(b) Plan
|
$18,000
|
$18,000
|
|
Section 408(p)(2)E SIMPLE Plan Contributions
|
$12,500
|
$12,500
|
|
Section 457(e)(15) Limit
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$18,000
|
$18,000
|
|
Section 415 Limit for:
Defined Contribution Plans
Defined Benefits Plans
|
$53,000
$210,000
|
$54,000
$215,000
|
|
Highly Compensated Employees Section 414(q)(1)(B)
|
$120,000
|
$120,000
|
|
Key Employee Section (416)(i)(1)(A)(i)
|
$170,000
|
$175,000
|
|
Includible Compensation:
Section 401(a)(17)
SEP Compensation
SEP Earnings Threshold
|
$265,000
$265,000
$600
|
$270,000
$270,000
$600
|
|
Limited Governmental Plans (pre 7/1/93)
|
$395,000
|
$400,000
|
|
Section 409 Employee Stock Ownership Plan Subject to 5-Year Distribution Period
Maximum Balance
Amount Used to Determine the Lengthening of the 5-Year Period
|
$1,070,000
$210,000
|
$1,080,000
$215,000
|
The 2017 dollar limitation under Section 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan, other than a plan described in Section 401(k)(11) or Section 408(p) for individuals aged 50 or over, remains unchanged at $6,000. The 2017 dollar limitation under Section 414(v)(2)(B)(ii) for catch-up contributions to an applicable employer plan described in Section 401(k)(11) or Section 408(p) for individuals aged 50 or over remains unchanged at $3,000.
For a copy of the IRS announcement, please click on the link provided below.
https://www.irs.gov/uac/Newsroom/IRS-Announces-2016-Pension-Plan-Limitations;-401(k)-Contribution-Limit-Remains-Unchanged-at-$18,000-for-2016
For a copy of Notice 2016-62 please click here.