One of the most common compliance issues for employers and plan sponsors is failure to adhere to annual retirement plan limits. To avoid costly penalties and administratively burdensome correction procedures, plan sponsors must remain up-to-date with respect to applicable retirement plan limits. Today, November 6, 2019, the IRS announced cost-of-living adjustments affecting the 2020 dollar limitations for retirement plans and other retirement-related items. Please note that the chart below does not include all applicable retirement plan limits, just some of the common ones.
401k Plan Limits
2020
2019
2018
2017
Elective Deferrals
$19,500
$19,000
$18,500
$18,000
Catch-Up Contributions
$6,500
$6,000
$6,000
$6,000
Annual Defined Contribution Limit
$57,000
$56,000
$55,000
$54,000
Annual Compensation Limit
$285,000
$280,000
$275,000
$270,000
Highly Compensated Employee
$130,000
$125,000
$120,000
$120,000
Non-401k Related Limits
Defined Benefit Plans
$230,000
$225,000
$220,000
$215,000
403(b)/457 Elective Deferrals
$19,500
$19,000
$18,500
$18,000
SIMPLE Employee Deferrals
$13,500
$13,000
$12,500
$12,500
SIMPLE Catch-Up Contribution
$3,000
$3,000
$3,000
$3,000
SEP Annual Compensation Limit
$285,000
$280,000
$275,000
$270,000
Social Security Wage Base
$137,700
$132,900
$128,400
$127,200
Hall Benefits Law, LLC recommends that you consult with ERISA legal counsel to assist you with any questions you may have regarding applicable limits for your retirement plans.
This content is intended to be informational and does not constitute legal advice regarding any specific situation. This material may also be considered attorney advertising under rules of certain jurisdictions.
