IRS Announces Pension Plan Limitations and Other Inflation-Adjusted Amounts for 2014

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.)

 

E. Drew Cheney Posted By
E. Drew Cheney

Posted Under: 401(k) plans, IR-2013-86

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