The Internal Revenue Service announced today the cost-of-living adjustments affecting the dollar limitations for qualified retirement plans that will allow employees to increase their retirement savings for 2016. Employees will be able to continue to defer up to $18,000 into their qualified defined contribution plans, and an additional $6,000 for those over the age of 50, for a combined total of $24,000. The Consumer Price Index for All Urban Consumers is the benchmark used, and the index did not have the increases needed to trigger adjustments for 2016. As a result, most of the 2016 dollar limits will remain unchanged as noted in the chart below:
Click here to view the table.
Employers and plan sponsors of qualified retirement plans should communicate these limits for 2016 to plan participants. We are available to advise you on updating your enrollment materials, summary plan descriptions, employee handbooks and other employee communications.