The IRS has recently released updated Pension Plan Limitations for the 2019 Plan Year. Below is a summary of the new limitations, including the limits set during the past two years.
Important changes to highlight for the 2019 Plan Year are as follows:
Defined Contribution Plans:
For participants who will be age 49 or less during 2019
- 401(k) deferral limits have been increased to $19,000;
- The total contribution limit, including both employee and employer contributions, will be limited to $56,000;
For participants who will attain age 50 or older during 2019
- 401(k) deferral limits have been increased to $25,000 ($19,000 plus the $6,000 catch-up contribution permitted);
- The total defined contribution limit, including both employee and employer contributions, will be limited to $62,000 ($56,000 plus the $6,000 catch-up contribution permitted);
For all participants during 2019:
- Compensation will be limited to a maximum of $280,000;
- The Cash Balance/ Defined Benefit Plan annual limit is $225,000;
- The maximum permissible lump sum distributions from a Cash Balance/ Defined Benefit Plan is $2.887 million during 2019 (at age 62);
For all 401(k) plans please be sure all Plan participants receive notification of the new limits in advance of the 2019 Plan Year, which will allow them time to adjust 401(k) deferral elections for the 2019 plan year, if necessary.
If you have any questions on this, please contact Nino Bondi or Ben Mebane from Porte Brown’s Retirement and Benefits Department.