650-266-9700
2014 Indexed Limits for Qualified Retirement Plans
Virginia Krieger Sutton, Pension Account Executive, Johnson & Dugan
Many employee benefit limits are automatically adjusted each year for inflation (this is
often referred to as an “indexed” limit). The Internal Revenue Service and the Social
Security Administration have released the indexed figures for 2014. Because inflation
is relatively low and some amounts are adjusted only if the increase meets a
minimum, many amounts are unchanged for 2014.
| LIMITS | 2013 | 2014 |
|---|---|---|
| 401(k) Employee Deferral Contribution Limit | $17,500 | $17,500 |
| 401(k) Catch-up Contribution Limit (over age 50) | $5,500 | $5,500 |
| 401(k) Annual Defined Contribution Limit (employee + employer contributions) | $51,000 | $52,000 |
| Plan Compensation Limit | $255,000 | $260,000 |
| Social Security Wage Base | $113,700 | $117,000 |
| Definition of Highly Compensated Employee | $115,000 | $115,000 |
Determination of Highly Compensated Employees:
1. Employees owning more than 5% of a company, as well as an employee who is a spouse, child, parent or grandparent of an employee owning more than 5% of a company will always be considered highly compensated.
2. Employees who earned more than $115,000 in 2012 will be considered highly compensated employees for 2013 non-discrimination testing.
3. Employees who earned more than $115,000 in 2013 will be considered highly compensated employees for 2014 non-discrimination testing.
2014 Maximum 401(k) Contributions:
- The maximum salary deferral contribution an employee can make is $17,500.
- If the employee is age 50 or older, the maximum is $23,000.
- If you have an employer match or other employer contribution to your plan, the maximum total contribution is $52,000 for employees under age 50 and $57,500 for employees who turn age of 50 or older during 2014.
If you have any questions about how these limits will affect your 401(k) plan or employees, please contact the Johnson & Dugan Retirement Services Team at 650-266-9700 or pensionservices@johnsondugan.com.
