The IRS recently announced cost-of-living adjustments for 2022. Below is a list of some of the key annual limits that will apply to qualified retirement plans in 2022:
- Compensation limit used in calculating a participant’s benefit accruals: increased to $305,000.
- Elective deferrals to 401(k) and 403(b) plans: increased to $20,500.
- Annual additions to a defined contribution plan: increased to $61,000.
- Catch-up contributions for employees aged 50 and over to 401(k) and 403(b) plans: remains unchanged at $6,500.
- Annual benefit limit for a defined benefit plan: increased to $245,000.
- Compensation dollar limit for defining a “key employee” in a top heavy plan: increased to $200,000.
- Compensation dollar limit for defining a “highly compensated employee”: increased to $135,000.
The full list of 2022 plan limits included in Notice 2021-61 is available here.