The Secretary of the Treasury announced the 2019 limits for qualified retirement plans and IRAs based on cost of living increases. The Consumer Price Index for all Urban Consumers is the benchmark used to determine the index. As a result, many of the 2019 dollar limits will increase, as noted in the included chart, and a few limits will remain flat. IRS Notice 2018-83 sets forth the annual dollar limitations effective Jan. 1, 2019, as required under Section 415(d) of the Internal Revenue Code. For 2019, employees will be able to defer up to $19,000 into their qualified defined contribution plans, and an additional $6,000 for those over the age of 50, for a combined total of $25,000. Highly compensated employees who earn more than $125,000 and who participate in both qualified and nonqualified plans will have a slightly greater amount of their compensation allocated to the qualified plan with the increase of the compensation limit from $275,000 to $280,000.
Employers and Plan Sponsors of qualified retirement plans should communicate these limits for 2019 to plan participants. We are available to advise you on updating your enrollment materials, summary plan descriptions, employee handbooks and other employee communications.