IRS Announces 2015 Pension Plan Limitations

On October 23, 2014 the IRS announced cost of living adjustments to pension plan and retirement-related items for 2015 and beyond.

Many pension and retirement plan limitations are tied to a cost of living index that contain statutory thresholds dictating when limitations will increase. While many of the pension and retirement plan limitations have met the statutory thresholds requiring adjustment not all limitations have the same thresholds, or are tied to the same index, and thus, will not be affected for 2015.

Many of these adjustments affect IRA, SIMPLE plans, 401(k), 403(b) and 457 plans. While we have highlighted many of the most applicable adjustments below this list is not all inclusive. For the full IRS announcement including a detailed listing of all the adjustments set to take effect in 2015, please click here.

• The elective deferral limit for employees who participate in 401(k), 403(b), most 457 plans and the federal governments Thrift Savings Plan is increased from $17,500 to $18,000.
• The catch-up contribution for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal governments Thrift Savings Plan is increased from $5,500 to $6,000.
• The limitation for defined contribution plans under Section 415(c)(1)(A) is increased from $52,000 to $53,000 in 2015.
• The AGI phase-out range for taxpayers contributing to a ROTH IRA is $183,000 to $193,000 for married couples filing jointly, up from $181,000 to 191,000 in 2014. For single and head of household taxpayers the income phase-out range is $116,000 to $131,000.
• The limitation on annual IRA contributions remains unchanged at $5,500.

Henderson Hutcherson & McCullough, PLLC, will continue to keep you updated. Contact James Purgason or any of your trusted advisors at HHM, today if you have any questions regarding this information.

Also, visit www.irs.gov for more information as it becomes available.