On October 23, 2014 the Internal Revenue Service (IRS) announced the cost-of-living adjustments impacting tax-qualified pension plans for 2015. The increase in the cost-of-living index met the statutory thresholds that trigger adjustments. As a result, increases were made to most of the general pension limitations, including the individual limits on deferrals and catch-up contributions, as well as the limit on annual compensation. The following table highlights some of the key limits that affect tax-qualified pension plans.
| Code Section | 2015 | 2014 |
| 401(a)(17)/404(l) Annual Compensation | $265,000 | $260,000 |
| 402(g)(1) Elective Deferrals | 18,000 | 17,500 |
| 414(v)(2)(B)(i) Catch-up Contribution | 6,000 | 5,500 |
| 415(b)(1)(A) Defined Benefit Plan Limits | 210,000 | 210,000 |
| 415(c)(1)(A) Defined Contribution Plan Limits | 53,000 | 52,000 |
| 457(e)(15) Deferral Limit | 18,000 | 17,500 |
| 414(q)(1)(B) Highly Compensated Employee Threshold | 120,000 | 115,000 |
| 409(o)(1)(C) ESOP Limits | 1,070,000 210,000 | 1,050,000 210,000 |
| 416(i)(1)(A)(i) Key Employee | 170,000 | 170,000 |
| 408(p)(2)(E) SIMPLE Maximum Contributions | 12,500 | 12,000 |
| 414(v)(2)(B)(ii) SIMPLE Catch-up Contribution | 3,000 | 2,500 |
| 408(k)(2)(C) SEP Minimum Compensation | 600 | 550 |
| 408(k)(3)(C) SEP Maximum Compensation | 265,000 | 260,000 |
| 1.61-21(f)(5)(i) Control Employee | 105,000 | 105,000 |
| 1.61-21(f)(5)(iii) Control Employee | 215,000 | 210,000 |
| Social Security Tax Wage Base | 118,500 | 117,000 |
The complete IRS table of cost-of-living adjustments for retirement items can be found on the IRS’s website.
Catherine R. Reese is a shareholder in the Indianapolis office of Ogletree Deakins.
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