The Internal Revenue Service (“IRS”) recently announced the 2014 cost-of-living adjustments for retirement, health and welfare plans and transportation programs.
Retirement Plan Limits
Although several limitations are changing in 2014, there are no changes to employee deferrals, age 50 catch-up contributions or IRA limitations. Notable 2014 annual limitations as compared to 2013 are as follows:
|
2014 |
2013 |
|
|---|---|---|
| 401(k), 403(b) & 457(b) plan employee deferrals |
$ 17,500 |
$ 17,500 |
| Employee age 50 catch-up contribution |
5,500 |
5,500 |
| SIMPLE plan employee deferrals |
12,000 |
12,000 |
| SIMPLE plan age 50 catch-up contribution |
2,500 |
2,500 |
| IRA contribution limit (traditional and Roth) |
5,500 |
5,500 |
| IRA age 50 catch-up contribution |
1,000 |
1,000 |
| Defined contribution plan limit |
52,000 |
51,000 |
| Defined benefit plan limit |
210,000 |
205,000 |
| Annual compensation limit |
260,000 |
255,000 |
| Highly compensated employee |
115,000 |
115,000 |
| Key employee |
170,000 |
165,000 |
| FICA taxable wage base |
117,000 |
113,700 |
Health and Welfare Plan Limits
The 2014 annual limitations as compared to 2013 are as follows:
|
2014 |
2013 |
|
|---|---|---|
|
2014 |
2013 |
|
| Flexible Spending Accounts (FSA) |
$ 2,500 |
$ 2,500 |
| HSA age 55 catch-up contribution |
1,000 |
1,000 |
| Self-only Coverage: |
3,300 |
3,250 |
| HSA contribution |
1,250 |
1,250 |
| Minimum deductible for HDHP |
6,350 |
6,250 |
HSA = Health Savings Account
HDHP = High Deductible Health Plan
OOP = Out-Of-Pocket
Qualified Transportation Fringe Benefit Limits
Please note a significant reduction has been made to the transit limitation for 2014 due to the expiration of a temporary limit. It is uncertain, but possible, that Congress will extend this limit for 2014 when they reconvene in January. The 2014 monthly qualified transportation fringe benefit limitations as compared to 2013 are as follows:
|
2014 |
2013 |
|
|---|---|---|
| Parking |
$ 250 |
$ 245 |
| Transit |
130 |
245 |
| Bicycle |
20 |
20 |
Plan sponsors should update payroll and plan administration systems for the 2014 cost-of-living adjustments and should incorporate the new limits in relevant participant communications.
For further information about the new IRS employee plan limits, contact your ORBA advisor or 312.670.7444.
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