Locke Lord QuickStudy: IRS Announces 2016 Retirement Plan Limitations – Most Limits Remain Unchanged

    Locke Lord Publications

    The Internal Revenue Service announced the 2016 cost-of-living adjustments to the dollar limitations for qualified retirement plans and other benefits, and the Social Security Administration announced its own cost-of-living adjustments for 2016. The elective deferral contribution limit for 401(k), 403(b) and 457(b) plans, as well as the catch-up contribution limit, remain unchanged from 2015. Other limits, such as the annual compensation limit under 401(a)(17), the limit used in the definition of highly compensated employee and the maximum annual contribution limit under Code Section 415, will not increase in 2016. 

    Retirement Plan Limits and Social Security Wage Base

      2016 Limits  2015 Limits
    401(k)/403(b)/457(b) Elective Deferrals
    $18,000 $18,000
    Catch-Up Contribution (plans other than SIMPLE plans)
     $6,000  $6,000
    SIMPLE Plan Employee Deferrals
     $12,500  $12,500
    SIMPLE Plan Catch-Up Contributions
     $3,000  $3,000
    Plan Maximum Annual Contribution – Defined Contribution Plans (Section 415(c))
     $53,000 $53,000
    Maximum Annual Benefit – Defined Benefit Plans (Section 415(b))
     $210,000  $210,000
    Compensation Limit under Section 401(a)(17)
     $265,000  $265,000
    Highly Compensated Employee Definition under Section 414(q)
     $120,000 $120,000
    Key Employees Officer Compensation for Top-Heavy Plans
     $170,000 $170,000
    Maximum ESOP Account Balance Subject to 5-Year Distribution Period   $1,070,000 $1,070,00
    Social Security (FICA) Wage Base
     $118,500 $118,500

    Health Savings Account and High Deductible Health Plan Limits

    Earlier this year, the IRS announced the inflation-adjusted amounts for health savings account and high-deductible health plans for 2016, which reflect an increase from 2015 for certain limits.

    Health Savings Accounts/HDHP Limits
      2016 Limits  2015 Limits 
    HSA Contribution -- Annual Contribution Limit      
    Self-Only Coverage $3,350  $3,350
    Family Coverage  $6,750 $6,650
    Catch-Up Contributions (age 55 or older)  $1,000 $1,000
    High Deductible Health Plan - Minimum Annual Deductible    
    Self-Only Coverage  $1,300  $1,300
    Family Coverage  $2,600  $2,600
    High Deductible Health Plan – Maximum Out of Pocket Limit 
    Self-Only Coverage $6,550  $6,450
    Family Coverage  $13,100  $12,900

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