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November 21, 2018

IRS Announces Cost of Living Adjustment (COLA) Limits for 2019 Applicable to Retirement Plans

The Internal Revenue Service and the Social Security Administration have announced the cost of living adjustments (COLA) applicable to dollar limitations for retirement plans and the Social Security wage base for 2019. Many of the limits that currently apply to the 2018 plan year will change for the 2019 plan year.

Employers should make sure that the individuals in charge of their payroll systems are aware of these limits. Also, employee communications and forms should be reviewed and updated as necessary to reflect these 2019 dollar limits.

Limit

Current 2018

2019

Maximum annual compensation that may be taken into acount for determinig benefits or contributions $275,000 $280,000
Maximum elective deferral contribution limit for employees who participate in 401(k), 403(b) and most 457 plans $18,500 $19,000
Maximum 401(k) and 403(b) and governmental 457(b) catch-up contribution limit for participants age 50 or older $6,000 $6,000
Defined contribution maximum annual addition $55,000 $56,000
Defined benefit maximum annual benefit $220,000 $225,000
Key employee top-heavy plan $175,000 $180,000
Highly compensated employee (HCE) $120,000 $125,000
Social Security taxable wage base (FICA) $128,700 $132,900


If you have any questions concerning the plan dollar limits or would like assistance with your employee retirement plans, please contact any member of our Employee Benefits Practice Group.

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