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    Locke Lord QuickStudy: IRS Announces 2018 Retirement Plan Limitations - Certain Limits are Increased

    Locke Lord Publications

    The Internal Revenue Service announced the 2018 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 2018. The elective deferral contribution limit for 401(k), 403(b) and 457(b) plans will increase to $18,500 but the dollar limit for catch-up contributions (if age 50 or older) remains unchanged at $6,000. 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 2018.


    RETIREMENT PLAN LIMITS AND SOCIAL SECURITY WAGE BAS

    2018 Limits

    2017 Limits

    401(k)/403(b)/457(b) Elective Deferrals

    $18,500

    $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))

    $55,000

    $54,000

    Maximum Annual Benefit – Defined Benefit Plans (Section 415(b))

    $220,000

    $215,000

    Compensation Limit under Section 401(a)(17)

    $275,000

    $270,000

    Highly Compensated Employee Definition under Section 414(q)

    $120,000

    $120,000

    Key Employees Officer Compensation for Top-Heavy Plans

    $175,000

    $170,000

    ESOP limit for determining the maximum account balance subject to the 5-year distribution limit

    $1,105,000

    $1,080,000

    ESOP dollar amount used for determining the lengthening of the 5-year distribution period

    $220,000

    $215,000

    Social Security (FICA) Wage Base

    $128,700

    $127,200



    HEALTH AND WELFARE PLAN LIMITS

    Health Flexible Spending Accounts

    2018 Limits

    2017 Limits

    Maximum Salary reduction limit

    $2,650

    $2,600

    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 2018. The HSA limit for self-only/family coverage will increase to $3,450 and $6,900, respectively for 2018. The minimum annual deductible and maximum annual out-of-pocket expense limits for high deductible health plans for both self-only and family coverage will increase in 2018. 

    Health Savings Accounts/HDHP Limits

    2018 Limits

    2017 Limits

    HSA Contribution -- Annual Contribution Limit

    Self-Only Coverage

    $3,450

    $3,400

    Family Coverage

    $6,900

    $6,750

    Catch-Up Contributions (age 55 or older)

    $1,000

    $1,000

    High Deductible Health Plan – Minimum Annual Deductible

    Self-Only Coverage

    $1,350

    $1,300

    Family Coverage

    $2,700

    $2,600

    High Deductible Health Plan – Maximum Out of Pocket Limit

    Self-Only Coverage

    $6,650

    $6,550

    Family Coverage

    $13,300

    $13,100


    2017 Limits  2016 Limits 401(k)/403(b)/457(b) Elective Deferrals  $18,000 $18,000Catch-Up Contribution (plans other than SIMPLE plans) $6,000 $6,000SIMPLE Plan Employee Deferrals $12,500 $12,500SIMPLE Plan Catch-Up Contributions $3,000 $3,000Plan Maximum Annual Contribution – Defined
    Contribution Plans (Section 415(c)) $54,000 $53,000Maximum Annual Benefit – Defined Benefit
    Plans (Section 415(b)) $215,000 $210,000Compensation Limit under Section 401(a)(17)  $270,000 $265,000Highly Compensated Employee Definition under Section 414(q) $120,000 $120,000Key Employees Officer Compensation for Top-Heavy Plans
     $175,000 $170,000Maximum ESOP Account Balance Subject to 5-Year Distribution Period  $1,080,000 $1,070,000Social Security (FICA) Wage Base  $127,200 $118,500
     2018 Limits  2017 Limits
    401(k)/403(b)/457(b) Elective Deferrals  $18,500  $18,000
    Catch-Up Contribution (plans other than SIMPLE plans)  $6,000  $6,000
    SIMPLE Plan Employee Deferrals  $12,500  $12,500

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