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IRS Publishes 2014 Pension Plan Limitations

Publisher: Day Pitney Alert
November 1, 2013
Day Pitney Author(s) Liza J. Hecht

Yesterday, the IRS announced cost-of-living adjustments applicable to certain dollar limitations for employee pension benefit plans for 2014:

  • The annual benefit limit for defined benefit plans is increased from $205,000 to $210,000.
  • The annual addition limit for defined contribution plans is increased from $51,000 to $52,000.
  • The annual limit with respect to the exclusion for elective deferrals to a 401(k), 403(b) or 457 plan remains unchanged at $17,500.
  • The annual limit on contributions to an individual retirement account (IRA) remains unchanged at $5,500. The dollar limit for catch-up contributions to an IRA remains unchanged at $1,000.
  • The annual limit on compensation that can be taken into account under a qualified retirement plan is increased from $255,000 to $260,000.
  • The dollar limit for defining key employees in a top-heavy plan is increased from $165,000 to $170,000.
  • The dollar amount for determining the maximum account balance in an employee stock ownership plan (ESOP) subject to a five-year distribution period is increased from $1,035,000 to $1,050,000. The dollar amount used to determine the lengthening of the five-year distribution period is increased from $205,000 to $210,000.
  • The dollar limit for catch-up contributions under a 401(k) plan for anyone 50 and older remains unchanged at $5,500, while the limit applicable to those participants under SIMPLE plans and SIMPLE IRAs remains unchanged at $2,500.
  • The limitation used in the definition of highly compensated employee remains unchanged at $115,000.

A complete list of applicable pension plan limitations can be found by clicking here.

If you have any questions about the cost-of-living adjustments or any other employee benefits or executive compensation matter, please contact a member of Day Pitney's Employee Benefits and Executive Compensation group.

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