On Thursday, October 19th, the IRS announced new statutory limits for the upcoming 2018 year. The most important changes applicable to retirement plans are outlined below.

After holding the line for a couple of years, the IRS increased the employee elective deferral limit (the §402(g) limit) from $18,000 to $18,500, for contributions to 401(k) and 403(b) plans.  The same limit applies for most 457 plans.  The catch-up contribution limit for employees over age 50 remains unchanged at $6,000.

The §415(c)(1)(A) limit on total contributions to a defined contribution plan on behalf of an individual was increased from $54,000 to $55,000, and the §415(b)(1)(A) limitation on the annual benefit under a defined benefit pension plan increased from $215,000 to $220,000.

The dollar threshold for determining “highly compensated employee” status remains at $120,000 for the third year in a row, and the annual compensation limit under §401(a)(17) that governs the amount of compensation that may be considered in a defined contribution plan increased from $270,000 to $275,000.

Additionally, the taxable wage base for social security increased from $127,200 to $128,700.  For a full listing of changes, including those impacting IRAs, SEPs and SIMPLEs, please see the IRS’ COLA Table.