IRS Announces Adjusted Plan Limits for 2015
Adjusted Limits
The Internal Revenue Service has announced the 2015 limits that affect the operation of tax-qualified retirement plans, including 401(k) plans, and certain other types of employee benefit plans, including deferred compensation plans that may be subject to Internal Revenue Code §409A. The amount by which the limits are adjusted each year is based on a cost of living index. Not all limits increase every year. Please see the accompanying table for the limits that are effective January 1, 2015, as well as a reference for comparison purposes to the 2014 limits, where different.
Social Security
The Social Security (OASDI) taxable wage base, which governs the amount of pay subject to Social Security tax withholding and affects plans that are "integrated" with Social Security, also is subject to adjustment annually. For 2015, the OASDI taxable wage base has been increased to $118,500.
ADJUSTED LIMITS | ||
| Provision | 2015 Limit | 2014 Limit (where different) |
| Maximum 401(k) Contributions | $18,000 | $17,500 |
| Maximum Compensation Limit | $265,000 | $260,000 |
| Highly Compensated Employees Earning (in previous year) more than | $120,000 | $115,000 |
| Key Employee Compensation Limit | $170,000 | |
| Annual Contribution Limit for Defined Contribution Plans | $53,000 | $52,000 |
| Annual Benefit Limit for Defined Benefit Plans | $210,000 | |
| SIMPLE Plan Limit | $12,500 | $12,000 |
| Age 50 and Older Catch-Up Contribution Limit All plans other than SIMPLE Plans SIMPLE Plans | $6,000 $3,000 | $5,500 $2,500 |
| Annual Contribution Limit for Section 457 Deferred Compensation Plans (government and tax-exempt organizations) | $18,000 | $17,500 |
| ESOP: Maximum account balance subject to five-year distribution period Each dollar amount of in excess of account balance that adds one year to distribution period | $1,070,000 $210,000 | $1,050,000 |
| Simplified Employee Pension Plans (SEPs) Contributions must be made for employees earning at least | $600 | $550 |
| 409A Minimum Specified Employee (Officer) Compensation Requirement | $170,000 | |
| 409A Involuntary Separation Pay Exception | $530,000 | $520,000 |
If you have questions about this Alert, please contact a member of your Cooley team or one of the attorneys above from the Compensation & Benefits Group.
Related contacts
This content is provided for general informational purposes only, and your access or use of the content does not create an attorney-client relationship between you or your organization and Cooley LLP, Cooley (UK) LLP, or any other affiliated practice or entity (collectively referred to as “Cooley”). By accessing this content, you agree that the information provided does not constitute legal or other professional advice. This content is not a substitute for obtaining legal advice from a qualified attorney licensed in your jurisdiction and you should not act or refrain from acting based on this content. This content may be changed without notice. It is not guaranteed to be complete, correct or up to date, and it may not reflect the most current legal developments. Prior results do not guarantee a similar outcome. Do not send any confidential information to Cooley, as we do not have any duty to keep any information you provide to us confidential. This content may be considered Attorney Advertising and is subject to our legal notices.