The IRS has issued Notice 2016-62, which sets forth its annual list of adjusted qualified retirement and other plan limits for 2017.
The limit on the exclusion for elective deferrals under Internal Revenue Code (IRC) 402(g)(1) remains unchanged at $18,000, and the dollar limit under IRC 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan (other than a plan described in IRC 401(k)(11) or 408(p)) for individuals age 50 or older remains unchanged at $6,000. A number of other limits also remain unchanged.
Notable changes include the following:
- The limitation on the annual benefit under a defined benefit plan under IRC 415(b)(1)(A) is increased from $210,000 to $215,000.
- The limitation for defined contribution plans under IRC 415(c)(1)(A) is increased from $53,000 to $54,000.
- The annual compensation limit under IRC 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $265,000 to $270,000.
- The dollar limitation under IRC 416(i)(1)(A)(i) regarding the definition of “key employee” in a top-heavy plan is increased from $170,000 to $175,000.
- The dollar limit under IRC 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a five-year distribution period is increased from $1,070,000 to $1,080,000. The dollar amount used to determine the lengthening of the five-year distribution period is increased from $210,000 to $215,000.
- The annual compensation limitation is increased from $395,000 to $400,000 under IRC 401(a)(17) for eligible participants in certain governmental plans that (under the plan as in effect on July 1, 1993) allowed cost-of-living adjustments to the compensation limitation under the plan under IRC 401(a)(17) to be taken into account.
- The dollar amount under IRC 430(c)(7)(D)(i)(II) used to determine excess employee compensation with regard to a single-employer defined benefit pension plan for which the special election under IRC 430(c)(2)(D) has been made is increased from $1,106,000 to $1,115,000.