IRS Announces 2017 Pension Plan Limits
On October 27 the Internal Revenue Service released Notice 2016-62 which announced cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2017. In general, the pension plan limitations will not change because the increase in the cost-of-living index did not meet the statutory thresholds that trigger their adjustment.
CLICK HERE TO ACCESS OUR PRINTABLE TABLE OF LIMITS FOR 2017.
Highlights of unchanged limitations for 2017 include:
The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan remains unchanged at $18,000.
The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan remains unchanged at $6,000.
The limit on annual contributions to an IRA remains unchanged at $5,500. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000
- Other limitations will change because the increase in the index did meet the statutory thresholds. Most plans incorporate cost of living adjustments in their plan documents so no amendments should be required on account of these increases. However, plans that are amended, established, or restated should review their Summary Plan Descriptions and revise as necessary to reflect these changes.
Plan sponsors may also wish to communicate some of these changes to plan participants before the end of 2016 to help ensure that employees maximize their retirement savings opportunities in the coming year.
If you have questions about how these changes may affect your retirement plan please contact your IPS Advisors Employee Benefit Specialist or one of our Retirement Plan Consultants:
The information provided is for educational purposes only. This information is from sources we believe to be reliable, but we cannot guarantee or represent that it is accurate or complete. The opinions are those of the writer, and the opinions and information presented are subject to change without notice.