2016 Qualified Plan Cost of Living Increases, 2016 Social Security Taxable Wage Base

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October 21, 2015

The Internal Revenue Service has announced the cost-of-living adjustments for the various qualified retirement plan limits. All of the limits shown below remain unchanged from last year.

Qualified Plan Limit Cost-of-Living Adjustments
401(k) and 403(b) elective deferral limit 2015:  $18,000

2016:  $18,000

$200,000 compensation limit 2015:  $265,000

2016:  $265,000

$160,000 defined benefit limit 2015:  $210,000

2016:  $210,000

$40,000 defined contribution limit 2015:  $53,000

2016:  $53,000

$80,000 definition of highly compensated employee 2015:  $120,000

2016:  $120,000

SIMPLE IRA deferral limit 2015:  $12,500

2016:  $12,500

Code Section 457 deferred compensation plan deferral limit 2015:  $18,000

2016:  $18,000

Code Section 414(v) catch-up contribution limit for employee deferrals 2015:  $6,000

2016:  $6,000

All of the above are plan year limits (i.e., for the plan year which begins in 2016), with the exception of the Code Section 401(k) and Code Section 403(b) elective deferral limit, which is a calendar year limitation.

In addition, the Department of Health and Human Services has set the maximum taxable wages for the OASDI portion of the social security tax at $118,500 for 2016, which is the same as for 2015.

If you have questions regarding the above, please contact Attorney Mary Ellen Schill, who prepared this article, or any of the attorneys within the Employment, Benefits & Labor Relations Group of Ruder Ware.

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