Pension Plans Contribution Limits

Cost-of-living adjustments (COLAs) that affect pension plan dollar limitations and other retirement-related provisions have been released by the IRS, effective January 1, 2014. In general, many of the pension plan limitations will change for 2014 because the increase in the cost-of-living index due to inflation met the statutory thresholds that trigger their adjustment. However, other limitations will remain unchanged.

The contribution limit for Code Sec. 401(k) , Code Sec. 403(b) and Code Sec. 457(b) plans and the federal government Thrift Savings Plan remains $17,500. For those aged 50 or over, the catch-up limit remains at $5,500. The adjusted gross income (AGI) phase-out range for taxpayers making contributions to an IRA or a Roth IRA has increased, as have the AGI phase-out ranges for the retirement savings contributions credit.

The maximum limitation for the Code Sec. 415(b)(1)(A) annual benefit for defined benefit plans is increased to $210,000, while the Code Sec. 415(c)(1)(A) limitation for defined contribution plans is increased for 2014 to $52,000. Also, for participants who separate from service before 2014, the Code Sec. 415(b)(1)(B) limitation for 2014 is computed by multiplying the participant’s 2013 compensation limitation by 1.0155. The compensation amounts under Reg. ยง1.61-21(f)(5)(i) concerning the definition of control employee for fringe benefit valuation purposes is increased to $105,000.

The annual compensation limit under Code Secs. 401(a)(17) , Code Sec. 404(l) , Code Sec. 408(k)(3)(C) and Code Sec. 408(k)(6)(D)(ii) is increased to $260,000. The annual compensation limitation under Code Sec. 401(a)(17) for eligible participants in certain governmental plans that, under the plan as in effect on July 1, 1993, allowed COLAs to the compensation limitation under the plan to be taken into account, is increased to $385,000.


MarkJBurger