The Internal Revenue Service has announced the cost-of-living adjustments affecting the dollar limitations for qualified retirement plans that will allow employees to increase their retirement savings for 2015. Employees will be able 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, up from $23,000 in 2014. We have highlighted some of the new limits in the table below, comparing the new limits to the limits of the prior three years. The Consumer Price Index for all Urban Consumers is the benchmark used to determine if the limits increase. Many of the 2014 dollar limits will increase because the thresholds to trigger adjustments for 2015 have been met, as highlighted in bold in the chart below:
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Employers and plan sponsors of qualified retirement plans should look to implement the new limits for 2015.