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November 2013

IRS Announces Cost of Living Adjustment (COLA) Limits for 2014 Applicable to Retirement Plans

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.


Limit

Current 2013

2014

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.

 

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