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2017 Dollar Limits on Benefits & Compensation for Qualified Retirement Plans, SEPs and SIMPLEs

- October 26, 2016

By Barry R. Milberg

The IRS recently announced the 2017 dollar limits on benefits and compensation for qualified retirement plans, SEPs and SIMPLEs 

These limits increase annually based on cost-of-living adjustments (COLA) subject to preset minimum increments.  However, this year's COLA did not achieve the preset minimum increments for many categories; therefore, only the limits for 2017 shown in bold below increased compared to the 2016 limits.  Lastly, although it is not subject to increase based on preset minimum increment increases, the Social Security Wage Base did increase to 127,200.

Commentary  Although many of the limits did increase, all limits remain at historically high levels to facilitate plan designs that favor Key employees and business owners. 

 Access 2013-2017 limits chart here or via link provided below.

2017 IRS Limits for Qualified Retirement Plans, SEPs and SIMPLEs

 

2017 Limit 

Minimum Increment

for COLA Increase

Applicable

Measuring Period

Defined Contribution

   Annual Additions Limit

 $54,000

$1,000 

Limitation Years

ending in 2017

Defined Benefit

   Annual Benefit Limit

$215,000

$5,000 

Limitation Years

ending in 2017

Social Security

   Taxable Wage Base

$127,200 

 N/A  

For Permitted Disparity,

Plan Years beginning in '17

Qualified Retirement Plan

   Compensation Limit

$270,000 

$5,000 

Plan Years beginning in '17

401(k)/403(b)/457(b)

   Calendar Year Deferral Limit

$18,000 

$500

Calendar Year

SIMPLE Plan

   Calendar Year Deferral Limit

$12,500

$500

Calendar Year

"Catch-up" Limit (age 50+)

   401(k)/403(b)/457

   SIMPLE

$6,000 

$3,000 

$500

Calendar Year

SEP Contribution Eligibility

   Min. Compensation Required

$600 

$50 

Limitation Years

ending in 2017

HCE Definition

   Compensation Test

$120,000 

$5,000 

Look Back Years

beginning in 2016

Top heavy Key EE Definition

 

 

 

   Top Ten Owner Test

N/A

N/A

 

   Officer Test

$175,000 

$5,000 

 Plan Year that includes the 2017 Top Heavy determination date

   1% Owner Test

$150,000 

N/A

2013-2017 IRS Limits on Benefits and Compensation for Qualified Retirement Plans, SEPs and SIMPLEs Chart

2017 Combined Cash Balance Pension and Profit Sharing/401(k) Plans' Maximum Benefits & Contribution Limits

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© 2016 ERISA Expertise LLC  All Rights Reserved

The information provided is intended as a general resource, not as investment or retirement planning, or legal plan compliance advice or counsel.  If you consider any actions discussed in this update, we suggest that you consult a qualified planning, tax or ERISA professionalERISA Expertise LLC and Barry R. Milberg do not warrant and are not responsible for any errors and omissions from this update.  Any tax advice included in this written or electronic communication is not intended or written to be used, and it cannot be used, by the taxpayer for the purpose of avoiding any penalties that may be imposed on the taxpayer by any governmental taxing authority or agency.

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