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Thanks, in part, to the government shutdown, we had to wait a little bit longer for this year's update to the retirement plan limits. The new limits rolled off the press just in time for Halloween. While several of the limits increased for 2014, most remained level.
We have updated the chart on our website that shows the limits for the last three years, and some of the new limits are listed below.
The more things change...
- Annual Compensation: Increases from $255,000 to $260,000
- Annual Additions Limit
- Defined Contribution Plan: Increases from $51,000 to $52,000
- Defined Benefit Plan: Increases from $205,000 to $210,000
- Key Employee: Officer compensation increases from $165,000 to $170,000
- Social Security Wage Base: Increases from $113,700 to $117,000
The more things stay the same...
- Elective Deferrals
- 401(k)/403(b)/457: Unchanged at $17,500
- SIMPLE IRA: Unchanged at $12,000
- Catch-Up Contributions
- 401(k)/403(b)/457: Unchanged at $5,500
- SIMPLE IRA: Unchanged at $2,500
- HCE Determination: Compensation unchanged at $115,000
Please let us know if we can answer any questions about how these new limits may impact your plan design for 2014.
Other Items To Note
There are a few other items on the horizon that we thought we would pass along.
- Safe Harbor Plan Amendments: Despite many industry requests for flexibility, the IRS is standing firm on limiting amendments to safe harbor plans to the beginning of the year. If you would like to add safe harbor to your plan or amend your existing safe harbor plan, we will need to receive your request no later than Monday, November 11, 2013, to ensure completion by the December 1st notice deadline.
- Roth Conversions: It has been almost a year since Congress made it more widely available for participants to convert plan accounts from tax-deferred to Roth. Unfortunately, the IRS has not yet issued guidance on some of the implementation details. We will continue to watch for more information and will pass it along when it is available.
- DOMA: This summer, the Supreme Court struck down a portion of the federal Defense of Marriage Act, limiting federal recognition of marriages to only those of opposite genders. Now, same-gender spouses are treated the same as opposite-gender spouses for retirement plan purposes. Keep this in mind as you gather year-end census information.
- Document Restatements: Starting next year, probably in the April - June timeframe, mandatory plan document restatements will begin. This impacts all defined contributions plans, e.g. 401(k) plans, that use prototype or volume submitter documents. We will be monitoring the situation and providing additional information as we learn more.
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