October 2016 HR Alert | IRS Releases 2017 Retirement Plan Limits

HR Alert

October 2016


One of the most common compliance issues for employers and plan sponsors is failure to adhere to annual retirement plan limits. In order to avoid costly penalties and administratively burdensome correction procedures, plan sponsors must remain up-to-date with respect to applicable retirement plan limits. Today, October 27, 2016, the IRS announced cost-of-living adjustments affecting 2017 dollar limitations for retirement plans and other retirement-related items. Many of the 2017 limits remain unchanged from 2016. However, both the 2017 401(k) annual defined contribution limit and the annual compensation limit increased slightly. Below is a chart listing retirement plan (401(k) and non-401(k) plan) limits for the 2014-2017 plan years. Please note that the chart below does not include all applicable retirement plan limits, just some of the common ones.
401k Plan Limits
2017 2016 2015 2014
Elective Deferrals $18,000 $18,000 $18,000 $17,500
Catch-Up Contributions $6,000 $6,000 $6,000 $5,500
Annual Defined Contribution Limit $54,000 $53,000 $53,000 $52,000
Annual Compensation Limit $270,000 $265,000 $265,000 $260,000
Highly Compensated Employee $120,000 $120,000 $120,000 $115,000
Non-401k Related Limits
Defined Benefit Plans $215,000 $210,000 $210,000 $210,000
403(b)/457 Elective Deferrals $18,000 $18,000 $18,000 $17,500
SIMPLE Employee Deferrals $12,500 $12,500 $12,500 $12,000
SIMPLE Catch-Up Contribution $3,000 $3,000 $3,000 $2,500
SEP Annual Compensation Limit $270,000 $265,000 $265,000 $260,000
Social Security Wage Base $127,200 $118,500 $118,000 $117,000
Additional limitations that will change from 2016 to 2017 include:
  • For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $186,000 and $196,000 (up from $184,000 and $194,000).
  • The AGI phased-out range for taxpayers making contributions to a ROTH IRA is $186,000 to $196,000 for married couples filing jointly (up from $184,000 and $194,000). For singles and heads of household, the income phase-out range is $118,000 to $133,000 (up from $117,000 to $132,000).
Hall Benefits Law, LLC recommends that you consult with ERISA legal counsel to assist you with any questions you may have regarding applicable limits for your retirement plans.

Leave a Reply

  • (will not be published)

Anne Tyler is great at interpreting the law. Her research and easy to understand documents are professional, organized, thorough and delivered in a timely manner. We appreciate her accessibility and willingness to offer suggestions and meet with our clients in person or via phone for meaningful discussions and getting answers quickly.
Andy WeyenbergVP of Operations |Resource Alliance
Anne Tyler is an excellent advisor with a true command of ERISA and Benefits law.  She is an effective communicator and a favorite of clients and colleagues.
Anson AsburyPrincipal |Asbury Law Firm
Anne Tyler is a true expert in her field, and I am honored to refer my clients to her. All that I have referred to her are always impressed with her knowledge, compassion, and ability to give her clients clarity and creative solutions. I highly recommend Anne Tyler to anyone who is looking for an employee benefits attorney; she knows how to get results.
Sara KhakiAttorney/Owner |The Khaki Law Firm LLC
Hall Benefits Law, LLC assisted me with review, documentation, and a written opinion for a specific DOL situation. Anne Tyler is professional as well as personable, articulate, and knowledgeable on the subject for which I hired her. Working with someone who has personality and good communication skills is not necessarily a common attribute. Anne Tyler brings these attributes. The price for the work done, independent research as well as client presentation, was very fair and I would be happy to recommend Anne Tyler to any associate or colleague in need of her legal expertise.
H.W. YoungbloodPresident |Financial Network Associates, Inc.
Anne Tyler is an energetic and conscientious attorney with experience in compliance issues for ERISA and Benefits matters, having worked at some of the most prestigious law firms in the Southeast. She is also very personable, which is a great combination.
Nancy PridgenAttorney |Patel Burkhalter Law Group
My overall experience with Hall Benefits Law, LLC was very pleasing and the service received from Anne Tyler was exemplary in every way. I required technical research in a number of different areas and Anne Tyler performed them above expectation. She was knowledgeable, responsive, cogent, and accessible. I will be happy to recommend her for similar issues.
Samuel R. ChandOwner |Samuel R. Chand Consulting
Hall Benefits Law, LLC brings the unique qualities of availability and approachability, as well as thought provoking discussion that greatly assists us with our clients. Anne Tyler is always willing and available to bring her knowledge and expertise about health care law which eases any concerns about compliance. In a client meeting to discuss the Affordable Care Act, Anne Tyler’s unique way of presenting complex information in an easy to understand manner enabled the client to formulate an action plan. She is an absolute pleasure to work with.
Jeff KochDirector of Benefits & Marketing Communications |Resource Alliance