The IRS recently announced the inflation-adjusted limits for 2020 for tax qualified retirement plans. Below is a list of some of the key annual limits that will apply in 2020:
• Compensation limit used in calculating a participant’s benefit accruals: increased to $285,000.
• Elective deferrals to 401(k) and 403(b) plans: increased to $19,500.
• Annual additions to a defined contribution plan: increased to $57,000.
• Catch-up contributions for employees aged 50 and over to 401(k) and 403(b) plans: increased to $6,500.
• Annual benefit limit for a defined benefit plan: increased to $230,000.
• Compensation dollar limit for defining a “key employee” in a top heavy plan: increased to $185,000.
• Compensation dollar limit for defining a “highly compensated employee”: increased to $130,000.
The complete list of 2020 plan limits is available in Notice 2019-59 here.