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2017 Cost-of-Living Adjustments on IRS Benefit and Contribution Limits

Author: Catherine R. Reese (Indianapolis)

Published Date: October 31, 2016

On October 27, 2016, the Internal Revenue Service (IRS) announced the cost-of-living adjustments impacting tax-qualified pension plans for 2017. The increase in the cost-of-living index met the statutory thresholds that triggered adjustments in some of the general pension limitations, including the limit on annual compensation. However, the individual limits on elective deferrals and catch-up contributions will not change for 2017. The following table highlights some of the key limits that will continue to affect tax-qualified pension plans, including those that will increase for 2017:

Internal Revenue Code Section

2016

2017

401(a)(17) / 404(l)

Annual Compensation

$265,000

$270,000

402(g)(1)

Elective Deferrals

$18,000

$18,000

414(v)(2)(B)(i)

Catch-up Contributions

$6,000

$6,000

415(b)(1)(A)

Defined Benefit Plan Limits

$210,000

$215,000

415(c)(1)(A)

Defined Contribution Plan Limits

$53,000

$54,000

457(e)(15)

Deferral Limit

$18,000

$18,000

414(q)(1)(B)

Highly Compensated Employee Threshold

$120,000

$120,000

409(o)(1)(C)

ESOP Limits

$1,070,000

$210,000

$1,080,000

$215,000

416(i)(1)(A)(i)

Key Employee

$170,000

$175,000

408(p)(2)(E)

SIMPLE Maximum – Contributions

$12,500

$12,500

414(v)(2)(B)(ii)

SIMPLE Catch-up Contributions

$3,000

$3,000

408(k)(2)(C)

SEP Minimum – Compensation

$600

$600

408(k)(3)(C)

SEP Maximum – Compensation

$265,000

$270,000

1.61-21(f)(5)(i)

Control Employee

$105,000

$105,000

1.61-21(f)(5)(iii)

Control Employee

$215,000

$215,000

Social Security Taxable Wage Base

$118,500

$127,200


The complete IRS table of cost-of-living adjustments for retirement items can be found on the IRS’s website. 

Catherine R. Reese is a shareholder in the Indianapolis office of Ogletree Deakins.

Tracy L. Mounts is a paralegal in the Indianapolis office of Ogletree Deakins.

Catherine R. Reese  (Indianapolis)

Catherine R. Reese
Ms. Reese concentrates her practice in employee benefits. She works with employers to design, establish and administer qualified retirement plans (defined contribution, defined benefit, cash balance), welfare benefit plans, and nonqualified deferred compensation plans. She assists clients in complying with statutory and regulatory requirements for reporting and disclosure, testing, and corrections for benefit plans, as well as assisting with IRS, DOL and PBGC filings, audits, and queries. Ms....

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