New Retirement Plan Contribution Limits for 2015

by Curtis Farmer on February 9, 2015

in Administrative,Benefits

Retirement Plan

Many employers and their workforce are unaware that the IRS has raised contribution limits for defined-contribution retirement plans for the 2015 calendar year. There are two basic types of contribution limits that are imposed on a retirement plan: a limit on how much an employee can defer of his or her own paycheck and an overall limit on total contributions in a participant’s account. These limits are evaluated annually to determine if cost-of-living adjustments need to be made.

While a majority of employees aren’t usually affected by these limits, it is always a good idea to communicate these to your workforce.

The new contribution limits for 2015 are:

  • Elective deferrals for 401(k), 403(b), and 457(b) plans: $18,000, a $500 increase from 2014
  • Catch-up contributions for those over age 50: $6,000, another $500 increase from 2014
  • The maximum amount of compensation allowed to calculate contributions: $265,000, a $5,000 increase from 2014
  • The maximum amount of total contributions (the Annual Additions Limit) for the year: $53,000, an increase of $1,000 from 2014
  • Definition of a Highly Compensated Employee: $120,000, a $5,000 increase from 2014
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