Early Projections Suggest 2019 Increases in Most Contribution/Benefit Limits

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.

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