While the official determinations won’t be made until next month, an early projection suggests that nearly all qualified plan limits will increase next year.
Using the Internal Revenue Code's cost-of-living adjustment methods, the Consumer Price Index for All Urban Consumers (CPI-U) through August, and its own projected CPI-U value for September, benefits consultant Mercer has projected that the contribution limits for 401(k), 403(b) and 457 plans will increase to $19,000 in 2019 from $18,500 at present.
The 415(c) DC plan maximum annual addition is projected to increase from $55,000 to $56,000, and the 414(q)(1)(B) highly compensated employee and 414(q)(1)(C) top-paid group limit will be $125,000 in 2019, compared with $120,000 currently.
Other projected increases include:
- 408(p)(2)(E) SIMPLE plan elective deferrals: to $13,000 from $12,500 at present
- 415(b) DB plan maximum annuity: to $225,000 from $220,000
- 401(a)(17) and 408(k)(3)(C) compensation: to $280,000 from $275,000
- 416(i)(1)(A)(i) officer compensation for top-heavy plan key employee definition: to $180,000 from $175,000
One item which is not projected to increase is the catch-up contribution limit ($6,000 for most plans but $3,000 for SIMPLE plans).
The projections are based on the year-to-year increase in the third-quarter CPI-U (projected to be 2.5%–3.0%) after applying the Code's rounding rules.
The IRS is expected to announce official 2019 limits for retirement and other benefit-related purposes in October.