Posted by George Kasper
The Internal Revenue Service has announced the cost of living adjustments (COLA) applicable to dollar limitations for retirement plans for 2014. Several of the limits that currently apply to the 2013 plan year will change for the 2014 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 changes.
|Maximum annual compensation that may be taken into acount for determinig benefits or contributions||$255,000||$260,000 |
|Maximum elective deferral contribution limit for employees who participate in 401(k), 403(b) and most 457 plans||$17,500||$17,500|
|Maximum 401 (k) and 403 (b) and governmental 457 (b) catch-up contribution limit for participants age 50 or older||$5,500||$5,500|
|Defined contribution maximum annual addition||$51,000||$52,000|
|Defined benefit maximum annual benefit||$200,000||$210,000|
|Key employee top-heavy plan||$165,000||$170,000|
|Highly compensated employee compensation threshold||$115,000||$115,000|
|Social Security taxable wage base (FICA)||$113,700||$117,000|
Details on all the limits are available on the IRS web page by clicking here.