On Thursday, the IRS published Notice 2016-62, which sets forth various qualified plan limits for 2017. These limits were initially established within the Internal Revenue Code and are subject to annual cost-of-living increases. In the recent low-inflation environment, these limits have not been rapidly increasing.
There are, however, a few increases that will impact plan sponsors and participants in 2017, such as:
  • the annual compensation limit (sometimes called the “401(a)(17) limit”) increases from $265,000 to $270,000;
  • the total amount that may be contributed to a participant’s defined contribution plans (sometimes called the “415(c) limit”) increases from $53,000 to $54,000; 
  • the limit on the annual benefit under a defined benefit plan (the “415(b) limit”) increases from $210,000 to $215,000; and
  • the dollar amount regarding the definition of a “key employee” for top heavy plan purposes increases from $170,000 to $175,000.
Most of the other most relevant limits remain unchanged, such as:
  • the $18,000 limit on elective deferrals to 401(k), 403(b), and most 457 plans (the “402(g) limit”);
  • the $6,000 limit on catch-up contributions for participants 50 and over;
  • the $120,000 “highly compensated employee” threshold; 
  • the $12,500 limitation on SIMPLE retirement accounts; and
  • the $5,500 limit on IRA contributions.
We anticipate that the increase in the 401(a)(17) and 415(c) limits will be welcome news to higher paid employees, but that many would have liked to see a slight increase in the annual limits on elective deferrals and catch-up contributions.
Matt Eickman

Matt Eickman

Full Bio

Matthew loves to write. He also loves to think, though he’s probably a better writer than a thinker. He does not like to be on camera or in videos. This blog will allow him to write, challenge his ability to think, and, from time to time, test him with video blog entries.

He has a unique blend of legal and practical experience that helps us to serve our clients well. On the one hand, he has more than 12 years of private legal practice experience focusing exclusively on employee benefits, including time as a partner in an employee benefits boutique where he has represented clients in front of the DOL and IRS. On the other hand, he holds his FINRA Series 7 and 66 registrations and serves as the Director of ERISA Services for Qualified Plan Advisors.

Matthew likes to stay active. He provides fiduciary training, Investment Policy Statement design, and vendor oversight to our clients. He is an active member of the Employee Benefits Committee of the American Bar Association Tax Section, serving as Chair of the Defined Contribution Plans Subcommittee. He also has been appointed to the IRS TE/GE Gulf States Council and is a frequent speaker on regulatory developments, fiduciary responsibilities, and retirement readiness.

Most importantly, he stays active with his family. His wife, Laura, is the founder of REbeL, Inc., a not-for-profit organization. His three young boys are mixed up in far too many sports, and they enjoy traveling, watching college football, running with Dad, and rooting for the Huskers.
Matt Eickman
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