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IRS Announces 2016 Retirement Plan Contribution Limits

October 21, 2015

On October 21, 2015 - The IRS announced that it will not adjust most current contribution limitations for qualified retirement plans in the 2016 tax year. Key numbers, including the pension plan limitations, will remain unchanged in 2016 because the increase in the Consumer Price Index did not meet the statutory thresholds for their adjustment.

The tables below show the 2015 and 2016 contribution limitations for 457 plans, 401 plans, and IRAs.

More details on the retirement plan limits are available from the IRS.

457 Plan Limits

Limitation20162015
Annual Deferral Limit for 457 Plans $18,000 $18,000
"Pre-Retirement" Catch-Up Limit $18,000
($36,000 total)
$18,000
($36,000 total)
"Age 50" Catch-Up Limit $6,000
($24,000 total)
$6,000
($24,000 total)

401 Plan Limits

Limitation20162015
401 Defined Contribution Plans - Annual Additions (§415(c)(1)(A)) $53,000 $53,000
401 Defined Benefit Plans - Maximum Annual Benefit* (§415(b)(1)(A)) $210,000 $210,000
401 Annual Compensation Limit** (non-grandfather/ grandfather) (§401(a)(17))) $265,000/ $395,000 $265,000/ $395,000
Annual Deferral Limit for (§401(k) Plans (§402(g)) $18,000 $18,000
401(k) "Age 50" Catch-Up (§414(v)) $6,000
($24,000 total)
$6,000
($24,000 total)

Traditional IRA & Roth IRA Contribution Limits

Limitation20162015
Annual Contribution Limit $5,500 $5,500
"Age 50" Catch-Up Limit $1,000
($6,500 total)
$1,000
($6,500 total)

*Special limitations apply to defined benefit plans. Please contact your defined benefit plan administrator for additional information.

**OBRA 1993 provided a governmental exception for the maximum compensation limit that grandfathers certain employees under the 1993 compensation limit of $235,840. Employees eligible to participate in a governmental plan, utilizing the ICMA-RC plan document, prior to January 1, 1994, are subject to the maximum compensation limit of $235,840 as indexed and shown above as the "grandfather" limit. Employees eligible to participate in a governmental plan, utilizing the ICMA-RC plan document, after January 1, 1994, are subject to the maximum compensation limit of $150,000 as indexed and shown above as the "non-grandfather" limit.

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