October 26, 2017

IRS Announces 2018 Pension Plan Adjustments

The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans in 2018 is to increase to $18,500 from $18,000, the Internal Revenue Service said Oct. 19.

The catch-up contribution limit remains unchanged at $6,000 while the limit regarding SIMPLE retirement accounts remains unchanged at $12,500, the IRS said.

The compensation limit used in defining a highly compensated employee for 2018 remains unchanged at $120,000, the IRS said.

The annual compensation limit for qualified plans is to increase to $275,000 from $270,000, and the compensation limitation for defined contribution plans is to increase to $55,000 from $54,000, the agency said. The dollar limitation of “key employee” in a top-heavy plan remains at $175,000 for 2018.

Reproduced with permission from Bloomberg Law: Tax, Payroll Administration Guide Newsletter, Breaking News, (Oct. 19, 2017). Copyright 2017 by The Bureau of National Affairs, Inc. (800-372-1033) <http://www.bna.com>
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