Wipfli Alerts & Updates: Updated Employee Benefit Plan and IRA Quick Reference Table 2016 & 2017


October 31, 2016
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The Internal Revenue Service has announced the cost-of-living adjustments applicable to dollar limitations for various qualified retirement plans and other amounts for 2017(1). While the pension plan deferral and catch-up limits did not change, many of the annual pension plan limits and compensation thresholds did. Plan sponsors should verify that their administrative and payroll systems reflect the appropriate limits. Communications that specify benefit plan limits should be reviewed for accuracy before materials are given to participants.
 
  2016 2017
Compensation limit—IRC Sec. 401(a)(17) $265,000 $270,000
Defined benefit plan annual benefit limit $210,000 $215,000
Defined contribution plan annual contribution limit  $53,000  $54,000
     
Social Security tax wage base  $118,500  $127,200
Highly compensated employee compensation threshold  $120,000  $120,000
Key employee officer compensation threshold  $170,000  $175,000
     
SEP compensation threshold  $600  $600
     
401(k), 403(b), 457(b), and SARSEPs    
Elective deferral limit(2)  $18,000  $18,000
Catch-up contribution(3)  $6,000  $6,000
SIMPLE Plan    
Elective deferral limit(2)  $12,500  $12,500
Catch-up contribution(3)  $3,000  $3,000
IRA    
Elective deferral limit(2)  $5,500  $5,500
Catch-up contribution(3)  $1,000  $1,000
     
Traditional IRA deduction phaseout (AGI)    
Single, Head of Household—Active participant $61,000/$71,000 $61,000/$72,000
Married Filing Separate—Any spouse participates $0/$10,000 $0/$10,000
Married Filing Joint—Nonparticipating spouse $184,000/$193,000 $186,000/$196,000
Married Filing Joint—Participating spouse $98,000/$118,000 $99,000/$119,000
     
Roth IRA contribution eligibility (AGI)    
Married Filing Joint $184,000/$194,000 $186,000/$196,000
Single, Head of Household $117,000/$132,000 $118,000/$133,000
Married Filing Separate—Any spouse participates $0/$10,000 $0/$10,000
     
Retirement saver’s credit eligibility (AGI)    
Married Filing Joint $61,500 $62,000
Head of Household $46,125 $46,500
Married Filing Separate, Single $30,750 $31,000
 
(1) This table has been updated based on IRS News Release (IR-2016-62), October 27, 2016.
(2) This applies to the total of all elective deferrals an individual makes for the year to 401(k) plans, 403(b) plans, SARSEPs, and SIMPLE plans. However, deferrals to each SIMPLE plan in which the individual participates are also limited, as shown later in the table.
(3) Catch-up contributions are available each year to individuals who reach age 50 by December 31.
 
If you have any questions, or for more information about the 2017 cost-of-living adjustments for retirement plans, please contact Pam Branshaw, Tom Krieg, Bob Buss, Steve Blom, or your Wipfli relationship executive.
 
Wipfli’s employee benefit services practice is an independent, fee-for-service consulting, recordkeeping, and compliance provider, dedicated to helping clients meet their employee benefit needs. Wipfli has been providing qualified and nonqualified plan services for over 30 years.

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