Locke Lord QuickStudy: IRS Announces 2017 Retirement Plan Limitations – Most Limits Remain Unchanged

October 31, 2016

The Internal Revenue Service announced the 2017 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 2017. 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 2016. Other limits, such as the annual compensation limit under 401(a)(17), the limit used in the definition of key employee and the maximum annual contribution limit under Code Section 415, will increase in 2017.

Retirement Plan Limits and Social Security Wage Base
  2017 Limits   2016 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))
 $54,000  $53,000
Maximum Annual Benefit – Defined Benefit
Plans (Section 415(b))
 $215,000  $210,000
Compensation Limit under Section 401(a)(17)   $270,000  $265,000
Highly Compensated Employee Definition under Section 414(q)  $120,000  $120,000
Key Employees Officer Compensation for Top-Heavy Plans
 $175,000  $170,000
Maximum ESOP Account Balance Subject to 5-Year Distribution Period   $1,080,000  $1,070,000
Social Security (FICA) Wage Base   $127,200  $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 2017. The HSA limit for self-only coverage will increase to $3,400 for 2017 but the limit will remain $6,750 for individuals with family coverage. The minimum annual deductible and maximum annual out-of-pocket expense limits for high deductible health plans for both self-only and family coverage remain unchanged from 2016.

Health Savings Accounts/HDHP Limits
  2017 Limits  2016 Limits 
HSA Contribution -- Annual Contribution Limit     
Self-Only Coverage  $3,400
Family Coverage  $6,750
Catch-Up Contributions (age 55 or older)  $1,000  $1,000
High Deductible Health Plan – Minimum Annual
Self-Only Coverage  $1,300  $1,300
Family Coverage  $2,600  $2,600
High Deductible Health Plan – Maximum Out of Pocket
Self-Only Coverage  $6,550  $6,550
Family Coverage  $13,100  $13,100