On October 31, 2013, the Internal Revenue Service issued IR-2013-86, a news release announcing the 2014 inflation adjustments affecting pension plans and other retirement-related items. The following are amoung the more significant changes (and non-changes) for 2014:
- The elective deferral limit for employees who participate in 401(k), 403(b), and most 457 plans remains unchanged at $17,500.
- The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), and certain 457 plans remains unchanged at $5,500.
- The limitation on the annual benefit under a defined benefit plan is increased from $205,000 to $210,000.
- The limitation on annual contributions to defined contribution plans is increased from $51,000 to $52,000.
- The limit on the amount of compensation that can be taken into account for purposes of numerous tests is increased from $255,000 to $260,000.
- The dollar limitation concerning the definition of key employee in a top-heavy plan is increased from $165,000 to $170,000.
- The limitation used in the definition of highly compensated employee remains unchanged at $115,000.
- The limitation on elective SIMPLE retirement account contributions remains unchanged at $12,000. (This is before taking into account the additional contribution of $2,500 available to taxpayers who are at least 50 years of age; this amount is unchanged.)
- The deductible amount for an individual making contributions to an individual retirement account remains unchanged at $5,500. (This is before taking into account the additional contribution of $1,000 available to taxpayers who are at least 50 years of age; this amount is unchanged.)