IRS announces 2022 pension plan contribution and benefit limits

TThe IRS has announced contribution and benefit limits for qualified pension plans for 2022.

Contribution limit for employees participating in 401 (k), 403 (b) and most 457 plans, as well as the federal government savings plan will increase to $ 20,500, from 19,500 $ in 2021.

The catch-up contribution limit for employees aged 50 and over who participate in 401 (k), 403 (b) plans, most 457 plans and the Federal Government Savings Plan remains unchanged at $ 6,500 , according to the IRS.

The limitation on SIMPLE Employee Retirement Account Incentive Plan (SIMPLE) will be increased from $ 13,500 to $ 14,000.

At the same time, the limit on annual contributions to an Individual Retirement Account (IRA) remains unchanged at $ 6,000. The additional catch-up contribution limit for people 50 and over is not subject to an annual cost of living adjustment (COLA) and remains at $ 1,000.

Effective January 1, the annual benefit limit under a Defined Benefit (DB) plan under Section 415 (b) (1) (A) of the Internal Revenue Code (IRC) will be reduced from $ 230,000 to $ 245,000.

For a member who retired from service before January 1, the member’s compensation limit under a DB plan under section 415 (b) (1) (B) is calculated by multiplying the participant’s compensation limit, as adjusted until 2021, by 1.0534.

The limit for defined contribution (DC) plans under section 415 (c) (1) (A) (i.e. annual additions) has been increased for 2022 from $ 58,000 to 61 $ 000.

The limit used in the definition of “highly paid employee” under section 414 (q) (1) (B) will be increased from $ 130,000 to $ 135,000.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *