• IRS Announces Cost of Living Adjustment (COLA) Limits for 2015 Applicable to Retirement Plans
  • November 14, 2014 | Authors: Sharon Kowal Freilich; George J. Kasper; Nancy D. Lapera; Herbert H. Moorin
  • Law Firms: Pullman & Comley, LLC - Hartford Office ; Pullman & Comley, LLC - Bridgeport Office
  • The Internal Revenue Service has announced the cost of living adjustments (COLA) applicable to dollar limitations for retirement plans for 2015. Several of the limits that currently apply to the 2014 plan year will change for the 2015 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 2014

    2015

    Maximum annual compensation that may be taken into acount for determinig benefits or contributions

    $260,000

    $265,000

    Maximum elective deferral contribution limit for employees who participate in 401(k), 403(b) and most 457 plans

    $17,500

    $18,000

    Maximum 401 (k) and 403 (b) and governmental 457 (b) catch-up contribution limit for participants age 50 or older

    $5,500

    $6,000

    Defined contribution maximum annual addition

    $52,000

    $53,000

    Defined benefit maximum annual benefit

    $210,000

    $210,000

    Key employee top-heavy plan

    $170,000

    $170,000

    Highly compensated employee compensation threshold

    $115,000

    $120,000

    Social Security taxable wage base (FICA)

    $117,000

    $118,500