Coolidge Wall Co., L.P.A.
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IRS Announces 2017 Pension Plan Limitations

On October 27 the IRS announced cost-of-living adjustments for 2017 retirement plan contributions. For 2017, the amounts that individuals will be able to contribute to retirement plans will remain unchanged at $18,000. The catch-up contribution limit for employees age 50 and over will also remain unchanged at $6,000. IRA and SIMPLE retirement plan contribution limits will not change for 2017.

Although individual contribution limits will not change for 2017, the IRS has adjusted the maximums that apply to the defined contribution plan annual addition limit, the defined benefit plan annual benefit limit, the annual compensation limit applicable for retirement plan purposes, and the key employee compensation limit that applies to top-heavy determinations. The limitation used in the definition of highly compensated employee remains unchanged for 2017.

This chart summarizes the limitations for 2017:

Contribution Limits      2017        2016
Elective Deferral Limit - 401(k), 403(b) and 457(b) Plans $  18,000    $ 18,000
Catch-Up Contribution Limit $    6,000    $   6,000
Elective Deferral Limit - SIMPLE Retirement Plan $  12,500    $ 12,500
Catch-Up Contribution Limit - SIMPLE Retirement Plan $    3,000    $   3,000
Contribution Limit - IRA $    5,500    $   5,500
Catch-Up Contribution Limit - IRA $    1,000    $   1,000
Benefits and Compensation
Defined Contribution Plan Annual Addition Limit $  54,000    $  53,000
Defined Benefit Plan Annual Benefit Limit $215,000    $210,000
Annual Compensation Limit $270,000    $265,000
Highly Compensated Employee Limit $120,000    $120,000
Key Employee Compensation Limit $175,000    $170,000

The Social Security Administration earlier announced that the Social Security Wage Base for 2017 will increase about 7.8% to $127,200.

If you have questions about the new pension plan limitations, please contact Brent Gambill (937-449-5539) or Edie Crump (937-449-5530).

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