Locke Lord QuickStudy: IRS Announces 2019 Retirement Plan Limitations – Certain Limits are Increased
The Internal Revenue Service announced the 2019 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 2019. The elective deferral contribution limit for 401(k), 403(b) and 457(b) plans will increase to $19,000 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 2019.
RETIREMENT PLAN LIMITS AND SOCIAL SECURITY WAGE BASE
| 2019 Limits | 2018 Limits | |
| 401(k)/403(b)/457(b) Elective Deferrals | $19,000 | $18,500 |
| Catch-Up Contribution (plans other than SIMPLE plans) |
$6,000 | $6,000 |
| SIMPLE Plan Employee Deferrals |
$13,000 | $12,500 |
| SIMPLE Plan Catch-Up Contributions |
$3,000 | $3,000 |
|
Plan Maximum Annual Contribution – Defined Contribution Plans
(Section 415(c))
|
$56,000 | $55,000 |
| Maximum Annual Benefit – Defined Benefit Plans (Section 415(b)) |
$225,000 | $220,000 |
| Compensation Limit under Section 401(a)(17) |
$280,000 | $275,000 |
| Highly Compensated Employee Definition under Section 414(q) |
$125,000 | $120,000 |
| Key Employees Officer Compensation for Top-Heavy Plans |
$180,000 | $175,000 |
|
ESOP limit for determining the maximum account balance
subject to the 5-year distribution limit
|
$1,130,000 | $1,105,000 |
|
ESOP dollar amount used for determining the lengthening
of the 5-year distribution period
|
$225,000 | $220,000 |
| Social Security (FICA) Wage Base |
$132,900 | $128,400 |
HEALTH AND WELFARE PLAN LIMITS
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 2019. The HSA limit for self-only/family coverage will increase to $3,500 and $7,000, respectively for 2019. The maximum annual out-of-pocket expense limits for high deductible health plans for both self-only and family coverage will increase in 2019, but the minimum annual deductible limits remain the same.
Health Savings Accounts/HDHP Limits
| 2019 Limits |
2018 Limits |
|
| HSA Contribution -- Annual Contribution Limit |
|
|
| Self-Only Coverage |
$3,500 |
$3,450 |
| Family Coverage |
$7,000 |
$6,850* |
| Catch-Up Contributions (age 55 or older) |
$1,000 |
$1,000 |
| High Deductible Health Plan – Minimum Annual Deductible |
||
| Self-Only Coverage |
$1,350 |
$1,350 |
| Family Coverage |
$2,700 |
$2,700 |
| High Deductible Health Plan – Maximum Out of Pocket Limit |
||
| Self-Only Coverage |
$6,750 |
$6,650 |
| Family Coverage |
$13,500 |
$13,300 |
*Note that the HSA contribution limit for individuals with family coverage was originally announced to be $6,900 for 2018, as described in IRS Notice 2017-64. This limit was subsequently reduced to $6,850 under the Bipartisan Budget Act of 2018.
Don't miss a beat.
Sign up for our newsletter and get the latest to your inbox.