About this BlogWelcome to the Snell & Wilmer Benefits Blog. We will be posting about current employee benefits and executive compensation topics and issues. We invite you to contact the authors with your thoughts or questions.
This post has been updated as of June 7, 2018, to reflect the revised maximum annual HSA contribution limit for family coverage set out in Revenue Procedures 2018-18 and 2018-27.
The IRS recently announced cost-of-living adjustments for 2018 in Notice 2017-64 and related guidance. The key dollar limits for qualified retirement plans and health and welfare plans are noted below.
Qualified Retirement Plan Dollar Limits
|Limit on Section 401(k) deferrals (Section 402(g))||$18,000||$18,500|
|Dollar limitation for catch-up contributions (Section 414(v)(2)(B)(i))||$6,000||$6,000|
|Limit on deferrals for government and tax-exempt organization deferred compensation plans (Section 457(e)(15))||$18,000||$18,500|
|Annual benefit limitation for a defined benefit plan (Section 415(b)(1)(A))||$215,000||$220,000|
|Limitation on annual contributions to a defined contribution plan (Section 415(c)(1)(A))||$54,000||$55,000|
|Limitation on compensation that may be considered by qualified retirement plans (Section 401(a)(17))||$270,000||$275,000|
|Dollar amount for the definition of highly compensated employee (Section 414(q)(1)(B))||$120,000||$120,000|
|Dollar amount for the definition of a key employee in a top-heavy plan (Section 416(i)(1)(A)(i))||$175,000||$175,000|
|Dollar amount for determining the maximum account balance in an ESOP subject to a five-year distribution period (Section 409(o)(1)(C)(ii))||$1,080,000||$1,105,000|
|SIMPLE retirement account limitation (Section 408(p)(2)(E))||$12,500||$12,500|
|Social Security Taxable Wage Base||$127,200||$128,700|
Health and Welfare Plan Dollar Limits
|Annual Cost Sharing Limit (self-only coverage)||$7,150||$7,350|
|Annual Cost Sharing Limit (other than self-only coverage)||$14,300||$14,700|
|HDHP Out-of-Pocket Maximum (self-only coverage)||$6,550||$6,650|
|HDHP Out-of-Pocket Maximum (family coverage)||$13,100||$13,300|
|Annual HDHP Deductible (self-only coverage)||Not less than $1,300||Not less than $1,350|
|Annual HDHP Deductible (family coverage)||Not less than $2,600||Not less than $2,700|
|Maximum Annual HSA Contributions (self-only coverage)||$3,400||$3,450|
|Maximum Annual HSA Contributions (family coverage)||$6,750||$6,900*|
|Maximum HSA Catch-Up Contribution||$1,000||$1,000|
|Health Flexible Spending Account Maximum||$2,600||$2,650|
* The maximum annual HSA contribution for family coverage was reduced from $6,900 to $6,850 by Revenue Procedure 2018-18. Read More ›
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In a previous blog, we discussed the IRS’ elimination of its five year staggered determination letter cycle for individually designed plans. The IRS recently provided guidance to help sponsors of individually designed plans keep their plans in compliance with applicable law. Notice 2016-80 contains the first Required Amendments List (the “RA List”) for individually designed qualified retirement plans. In general, the RA List is a list of changes in the plan qualification requirements for changes that became effective in 2016. The list is divided into two parts—(A) changes in qualification requirements that would generally require an amendment to most plans or to most plans of the type affected by the change and (B) changes that the IRS and Treasury anticipate will not require an amendment in most plans, but might require an amendment due to an unusual provision in a particular plan. Read More ›
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If you are one of the lucky few employees who participate in an employer’s defined benefit retirement plan, you previously had to choose between receiving your benefits in a lump sum or in annuity payments. However, in the final rule adopted by the Treasury Department, defined benefit plans are allowed to offer participants the choice of taking a portion of their benefit in a lump sum and the remainder in annuity payments.
These new rules are designed to increase a participant’s flexibility in designing his or her retirement income. As Treasury explained, on the one hand, for plans that permitted a distribution of either lump sum or annuity payments, many participants were reluctant to take the annuity payments and instead chose a lump sum to maximize their flexibility. Read More ›
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