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    Locke Lord QuickStudy: IRS Announces 2019 Retirement Plan Limitations – Certain Limits are Increased

    Locke Lord Publications

    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.

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