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Glen Gahan
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November 2, 2018
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Cost of Living Adjustments for Retirement Plans – 2019

The IRS has released the 2019 cost of living adjustments affecting retirement plans. The adjustments and changes affect the limits applicable to all employees who defer salary into retirement plans, plans that are integrated with Social Security, the maximum benefit payable from defined benefit plans and the maximum annual additions for defined contribution retirement plans.  For your convenience, SilverStone Group has summarized the changes as follows:

Limitations for 2019:
  • The maximum annual additions under defined contribution plans increased from $55,000 to $56,000.
  • The maximum annual benefit from defined benefit pension plans increased from $220,000 to $225,000.
  • The maximum pretax elective deferral under a 401(k) plan, 457 plan and/or a 403(b)
    arrangement increased from $18,500 to $19,000.
  • The Age-50 Catch-Up Contribution limit for 401(k), 403(b), and Section 457 plans remains unchanged at $6,000.
  • The FICA Social Security wage base increased from $128,400 to $132,900.
  • The maximum annual compensation that can be considered under a qualified plan increased from $275,000 to $280,000.
  • The maximum pretax elective deferral to a SIMPLE arrangement increased from $12,500 to $13,000.
  • The minimum amount of compensation for eligibility for a simplified employee pension plan (SEP) contribution remains unchanged at $600.

The definition of a “highly compensated employee” is any person who:

  • Owns, or was treated as owning, 5% or more of the employer during 2018 or 2019, or
  • Earned more than $125,000 in 2019 (and, if the employer elects, is among the top 20% of
    employees ranked by pay).

The term “key employee” for 2019 is any employee who at any time during the relevant plan year or prior plan year, is:

  • An officer of the employer, having an annual compensation greater than $180,000;
  • A 5% owner of the employer; or
  • A 1% owner of the employer, having annual compensation from the employer of more
    than $150,000.

COLA 2019

View a printable version of the bulletin here.

This material is intended for informational purposes only and should not be construed as legal advice and is not intended to replace the advice of a qualified attorney, tax advisor or plan provider. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. The information provided herein is intended solely for SilverStone Group clients. You may not display, reproduce, copy, modify, license, sell or disseminate in any manner any information included in this special bulletin.

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