For 2019, most of the limits will remain the same however there were a few key increases to be aware of. For example, the IRS increased the employee’s contribution limit for 401(k) plan participants from $18,500 per year to $19,000 per year. Also, the defined contribution plan annual contribution limit increased from $55,000 to $56,000. These changes will need to be reflected in your company’s plan administration and payroll processes. Below is a summary table reflecting some of the key benefit plan limits:
RETIREMENT PLAN LIMITS | 2018 | 2019 |
| Annual compensation limit | $275,000 | $280,000 |
| 401(k), 403(b) & 457(b) employee contributions | $18,500 | $19,000 |
| Catch-up contributions (if age 50 or older) | $6,000 | $6,000 |
| Highly compensated employee threshold | $120,000 | $125,000 |
| Key employee officer compensation threshold | $175,000 | $180,000 |
| Defined contribution plan annual contribution limit | $55,000 | $56,000 |
| Employee stock ownership plan (ESOP) limit for determining the length of the general five-year distribution plan | $220,000 | $225,000 |
| ESOP limit for determining the maximum account balance subject to the general five-year distribution period | $1,105,000 | $1,130,000 |
| Roth IRA and traditional IRA | $5,500 | $6,000 |
| Roth IRA and IRA catch-up contributions | $1,000 | $1,000 |
| SIMPLE salary deferral | $12,500 | $13,000 |
| SIMPLE catch-up limit | $3,000 | $3,000 |
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It is important to update plan documents and benefit plan materials to reflect the recent changes. It is also important to consider any individual participant notification requirements that are necessary to remain in compliance with plan rules. If you have questions about the changes, please contact Smith Schafer for assistance.
