2016 Pension Plan Limitations

The Internal Revenue Service announced cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for the 2016 tax year.  Highlights of limitations that changed for 2016 include a $1,000 increase to both the phase-out range for IRA contributors who are not covered by a workplace retirement plan and are married to someone who is covered and the range for taxpayers making contributions to a Roth IRA for married couples filing jointly from $183,000-$193,000 to $184,000-$194,000.  The phase-out range for singles and heads of household making contributions to a Roth IRA was also increased by $1,000 from $116,00-$131,000 to $117,000-$132,000.  On the other hand, the pension plan limitations listed below will not change because the increase in the cost-of-living index did not meet the statutory thresholds that prompt their adjustment. 

2016 Pension Plan Limits that Remain Unchanged from 2015

  Annual salary deferrals for 401(k) and 403(b) plans  $18,000
  Age 50 catch-up contributions  $6,000
  Maximum total annual contributions  $53,000
  Maximum annual compensation  $265,000
  Traditional and Roth IRA contributions  $5,500
  Traditional and Roth IRA catch-up contributions  $1,000
  SIMPLE 401(k) and IRA contribution limit  $12,500
  Compensation dollar limit used to determine key employees in a top-heavy plan   $170,000
  Compensation threshold for highly compensated employees “HCE”   $120,00

Contact us for questions regarding the 2016 pension plan dollar limitations and visit our ERISA Industry Group page to learn about services that we can offer in regards to your company's benefit plans.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2020 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on

Department of Labor Finalizes Electronic Disclosure Rules
ERISA BY M. Michele Milheim
Tips and Tricks to Ensure You’re Ready for Your Employee Benefit Plan Audit
ERISA BY Jeanne Barrett
Form 5500 Filing Relief for Filings Due Before July 15, 2020
Extensions for Form 11-K Filings as a Result of COVID-19
ERISA BY Jenna Zelenski
2019 Mortality Table and Improvement Scale Updates
ERISA BY Donna Wolfson
U.S. Department of Labor Proposes New Electronic Disclosure Rule

Register to receive our weekly newsletter with our most recent columns and insights.

Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us

contact us

Map of Pittsburgh Office

One PPG Place, Suite 1700
Pittsburgh, PA 15222

p:412.261.3644     f:412.261.4876

Map of Columbus Office

65 East State Street, Suite 2000
Columbus, OH 43215

p:614.621.4060     f:614.621.4062

Map of Washington Office
Washington, D.C.

1660 International Drive, Suite 600
McLean, VA 22102