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CLIENT ALERT

January 20, 2014

2014 Employee Benefit Plan and Transportation Limits

The Internal Revenue Service (“IRS”) recently announced the 2014 cost-of-living adjustments for retirement, health and welfare plans and transportation programs.

Retirement Plan Limits
Although several limitations are changing in 2014, there are no changes to employee deferrals, age 50 catch-up contributions or IRA limitations.  Notable 2014 annual limitations as compared to 2013 are as follows:

 

2014

2013

401(k), 403(b) & 457(b) plan employee deferrals

$    17,500

$    17,500

Employee age 50 catch-up contribution

5,500

5,500

SIMPLE plan employee deferrals

12,000

12,000

SIMPLE plan age 50 catch-up contribution

2,500

2,500

IRA contribution limit (traditional and Roth)              

5,500

5,500

IRA age 50 catch-up contribution            

1,000

1,000

Defined contribution plan limit

52,000

51,000

Defined benefit plan limit

210,000

205,000

Annual compensation limit

260,000

255,000

Highly compensated employee

115,000

115,000

Key employee

170,000

165,000

FICA taxable wage base

117,000

Health and Welfare Plan Limits
The 2014 annual limitations as compared to 2013 are as follows:

 

2014

2013

Flexible Spending Accounts (FSA)

$    2,500

$    2,500

HSA age 55 catch-up contribution

1,000

1,000

Self-only Coverage:

3,300

3,250

HSA contribution

1,250

1,250

IMinimum deductible for HDHP        

6,350

6,250

HSA = Health Savings Account
HDHP = High Deductible Health Plan
OOP = Out-Of-Pocket


Qualified Transportation Fringe Benefit Limits

Please note a significant reduction has been made to the transit limitation for 2014 due to the expiration of a temporary limit.  It is uncertain, but possible, that Congress will extend this limit for 2014 when they reconvene in January.  The 2014 monthly qualified transportation fringe benefit limitations as compared to 2013 are as follows:

 

2014

2013

Parking

$    250

$    245

Transit

130

245

Bicycle

20

20


Plan sponsors should update payroll and plan administration systems for the 2014 cost-of-living adjustments and should incorporate the new limits in relevant participant communications.

For further information about the new IRS employee plan limits, contact Larry Ruff at lruff@orba.com or call him at 312.670.7444 for assistance.

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