On November 1, 2018, the Internal Revenue Service (IRS) announced the cost-of-living adjustments affecting tax-qualified pension plans for 2019. Most of the general pension limitations, including the limit on annual compensation that can be taken into account and the individual limits on elective deferrals and annual contributions, will increase based on the cost-of-living index. The individual limits on catch-up contributions for participants age 50 and over will not change for 2019. In the following table, we have listed some of the key limits that will continue to affect tax-qualified pension plans, including those that will increase for 2019 and those that will remain unchanged:
|
Code or Regulation Section |
2018
|
2019
|
Internal Revenue Code (IRC) §401(a)(17) / 404(l)
Annual Compensation |
$275,000
|
$280,000
|
IRC §402(g)(1)
Elective Deferral Limit |
$18,500
|
$19,000
|
IRC §414(v)(2)(B)(i)
Catch-Up Contribution Limit |
$6,000
|
$6,000
|
|
IRC §415(b)(1)(A) Defined Benefit Plan Limit |
$220,000
|
$225,000
|
IRC §415(c)(1)(A)
Defined Contribution Plan Limit |
$55,000
|
$56,000
|
IRC §457(e)(15)
Deferral Limit |
$18,500
|
$19,000
|
IRC §414(q)(1)(B)
Highly Compensated Employee Threshold |
$120,000
|
$125,000
|
Income Tax Regulations §1.401(a)(9)-6, A-17(b)(2)(i)
Qualifying Longevity Annuity Contract Premium Limit |
$130,000
|
$130,000
|
IRC §409(o)(1)(C)(ii)
Employee Stock Ownership Plan (ESOP) - Maximum Balance Subject to 5-year Distribution |
$1,105,000
|
$1,130,000
|
IRC §409(o)(1)(C)(ii)
ESOP - Dollar Amount to Determine Lengthening of 5-year Distribution |
$220,000
|
$225,000
|
IRC §416(i)(1)(A)(i)
Key Employee Threshold |
$175,000
|
$180,000
|
IRC §408(p)(2)(E)
SIMPLE Maximum Contribution Limit |
$12,500
|
$13,000
|
IRC §414(v)(2)(B)(ii)
SIMPLE Catch-Up Contribution Limit |
$3,000
|
$3,000
|
IRC §408(k)(2)(C)
Simplified Employee Pension (SEP) Minimum Compensation |
$600
|
$600
|
IRC §408(k)(3)(C)
SEP Maximum Compensation |
$275,000
|
$280,000
|
Income Tax Regulations §1.61-21(f)(5)(i)
“Control Employee” Compensation Threshold (Officer) |
$110,000
|
$110,000
|
Income Tax Regulations §1.61-21(f)(5)(iii)
“Control Employee” Compensation Threshold (Non-Officer) |
$220,000
|
$225,000
|
|
Social Security Taxable Wage Base |
$128,700
|
$132,900
|
