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IRS Announces Employee Benefit Plan Limits for 2015

Recently the Internal Revenue Service (IRS) and the Social Security Administration announced the cost-of-living adjustments to the applicable dollar limits on various employer-sponsored retirement and welfare plans and the Social Security wage base for 2015.  The table below compares the applicable dollar limits for certain employee benefit programs and the Social Security wage base for 2014 and 2015.*

RETIREMENT PLAN LIMITS 

2015

2014

Annual compensation limit

 $265,000

$260,000 

401(k), 403(b) and 457(b) before-tax contributions

 $18,000

$17,500 

Catch-up contributions (if age 50 or older)

 $6,000

$5,500 

Highly compensated employee threshold

 $120,000

$115,000 

Key employee officer compensation threshold

 $170,000

$170,000 

Defined benefit plan annual benefit and accrual limit

 $210,000

$210,000 

Defined contribution plan annual contribution limit

 $53,000

$52,000 

Employee stock ownership plan (ESOP) limit for determining the lengthening of the general five-year distribution period

 $210,000

$210,00 

ESOP limit for determining the maximum account balance subject to the general five-year distribution period

 $1,070,000

$1,050,000 

 

 

 

HEALTH AND WELFARE PLAN LIMITS

 

 

High Deductible Health Plans (HDHP) and Health Savings Accounts (HSA)

 

 

HDHP – Maximum Annual Out-of-Pocket Limit (excluding premiums):

 

 

Self-only coverage

 $6,450

$6,350 

Family coverage

 $12,900

$12,700 

HDHP – Minimum Annual Deductible:

 

 

Self-only coverage

 $1,300

$1,250 

Family coverage

 $2,600

$2,500 

HSA – Annual Contribution Limit:

 

 

Self-only coverage

 $3,350

$3,300 

Family coverage

 $6,650

$6,550 

Catch-up contributions (age 55 or older)

 $1,000

$1,000 

 

 

 

SOCIAL SECURITY WAGE BASE

 $118,500

$117,000

Plan sponsors should update payroll and plan administration systems for the 2015 cost-of-living adjustments and should incorporate the new limits in relevant participant communications, like open enrollment materials and summary plan descriptions.

For further information about applying the new IRS employee benefit plan limits for 2015, contact your regular McDermott lawyer or one of the authors. 

© 2019 McDermott Will & Emery

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About this Author

Associate

Jacob Mattinson is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office.  He focuses his practice on matters related to employee benefits and executive compensation.

312-984-3263
Stephen Pavlick Employee BenefitsLawyer, McDermott Will Emery Law firm
Partner

Stephen Pavlick is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Washington, D.C. office.  He focuses his practice on the area of employee benefits matters for large multinational corporations.  His clients include several Fortune 100 companies and a major trade association.  He is a member of the Tax Management Advisory Board for Compensation Planning and is a regular participant at their monthly luncheons with government officials.  Stephen is a Certified Public Accountant. 

Mr. Pavlick concentrates on qualified plans, related fiduciary and other Employee Retirement Income Security Act (ERISA) issues, deferred compensation and equity arrangements, and funding strategies for post-retirement welfare benefits. He has worked extensively with cash balance plans.

Stephen has served as an assistant professor at Drexel University. He is the author of several articles on cash balance plans, Code Section 409A, and the taxation of stock options and other executive compensation. He is also a certified public accountant.

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