The Internal Revenue Service recently announced the dollar limitations for pension plans and other items beginning January 1, 2018. Some of the limits are listed below.
|
LIMITATION |
2017 AMOUNT |
2018 AMOUNT |
|
|
Maximum Annual Compensation taken into account for determining benefits or contributions to a qualified plan |
$270,000 | $275,000 | |
|
Basic Elective Deferral Limitation for 401(k), 403(b) and 457(b) Plans1 |
$18,000 | $18,500 | |
|
Catch-up Contribution Limit for Persons Age 50 and older in 401(k), 403(b) or SARSEP Plans |
$6,000 | $6,000 | |
|
Limitation on Annual Additions to a Defined Contribution Plan2 |
$54,000 | $55,000 | |
|
Limitation on Annual Benefits from a Defined Benefit Plan3 |
$215,000 | $220,000 | |
|
Highly Compensated Employee Compensation Threshold4 |
$120,000 | $120,000 | |
|
SEP Compensation Threshold |
$600 | $600 | |
|
Social Security Taxable Wage Base for Social Security Tax (6.2%) For Medicare Tax (1.45% / 2.35%) |
$127,200 No Limit |
$128,700 No Limit |
|
|
Health Savings Accounts: |
|||
|
• Individual Contribution Limit |
$3,400 |
$3,450 |
|
|
Health Flexible Spending Accounts5 |
$2,600 | $2,650 | |
If you have any questions about this memorandum, please contact any member of our Employee Benefits and Executive Compensation Practice Group listed below.
Buffalo: 716.416.7000
John C. Godsoe
Robert W. Patterson
Long Island: 516.267.6300
Terry O’Neil
New York City: 646.253.2300
Michael P. Collins
Rochester: 585.362.4700
John C. Godsoe
Syracuse: 315.218.8000
Stephen C. Daley
Brian K. Haynes
Aaron M. Pierce
_______________
1 This limit and the catch-up limit also apply to Roth (after-tax) contributions under 401(k) and 403(b) plans that permit such contributions.
2 In no event may annual additions exceed 100% of a participant’s compensation.
3 In no event may a participant’s annual benefit exceed 100% of the participant’s average compensation for the participant’s high three years.
4 Generally, an employee is considered “highly compensated” if the employee:
(a) was a five-percent owner of the employer at any time during the current or preceding year; or
(b) received compensation from the employer in the preceding year of more than the applicable dollar limit for that year.
5 This limit applies only to voluntary employee salary reduction (pre-tax) contributions.