The Internal Revenue Service (IRS) recently announced cost-of-living adjustments impacting qualified retirement plans and health flexible spending accounts (FSAs) for 2015. For retirement plans, increases were made to most of the general plan limitations, including the individual limits on deferrals and catch-up contributions, as well as the limit on annual compensation. For FSAs, the inflation-adjusted limit will increase by $50. No change was made to transit and parking pre-tax subsidies or dependent care assistance plans. The following table highlights the changes made by the IRS.
Editor’s Note: The content of this article was heavily contributed by the attorneys of Ogletree Deakins, a labor and employment law firm representing management. This information should not be relied upon as legal advice.
| 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 |
| Health FSA | 2,550 | 2,500 |
| Dependent Care Assistance Plans | No change | 5,000 for qualified individuals and those who are married and file a joint return; 2,500 for those who are married and file separate returns |
| Qualified Transit Benefits | No change | $130 per month |
| Qualified Parking Benefits | No change | $250 per month |