Client Alerts 2017 Employee Benefit Plan and Transportation Limits

Publication
11.10.16 | By: Larry A. Ruff

The below presents the Internal Revenue Service (“IRS”) announced 2017 cost-of-living adjustments for retirement and health & welfare plans, and transportation programs.  Once again, the cost-of-living index did not change significantly this year.  This means there were few changes to the IRS 2017 limitations as compared to 2016.  The one significant change is to the FICA taxable wage base, which changes based on the average wage index.

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The below presents the Internal Revenue Service (“IRS”) announced 2017 cost-of-living adjustments for retirement and health & welfare plans, and transportation programs.  Once again, the cost-of-living index did not change significantly this year.  This means there were few changes to the IRS 2017 limitations as compared to 2016.  The one significant change is to the FICA taxable wage base, which changes based on the average wage index.

Retirement Plan Limits

Notable 2017 annual retirement plan limitations as compared to 2016 are as follows:

  2017 2016
401(k), 403(b) & 457(b) plan employee deferrals  $ 18,000 $ 18,000
Employee age 50 catch-up contribution 6,000 6,000
SIMPLE plan employee deferrals     12,500 12,500
SIMPLE plan age 50 catch-up contribution       3,000 3,000
IRA contribution limit (traditional and Roth) 5,500 5,500
IRA age 50 catch-up contribution 1,000 1,000
Defined contribution plan limit 54,000 53,000
Defined benefit plan limit 215,000 210,000
Annual compensation limit 270,000 265,000
Highly compensated employee   120,000   120,000
Key employee   175,000   170,000
FICA taxable wage base 127,200 118,500

Health and Welfare Plan Limits

The 2017 annual limitations as compared to 2016 are as follows:

  2017 2016
Flexible Spending Accounts (FSA) $ 2,600 $ 2,550
HSA age 55 catch-up contribution 1,000 1,000
Self-only Coverage:    
HSA contribution 3,400 3,350
Minimum deductible for HDHP 1,300 1,300
Maximum OOP expense limit for HDHP 6,550 6,550
Family Coverage:    
HSA contribution 6,750 6,750
Minimum deductible for HDHP 2,600 2,600
Maximum OOP expense limit for HDHP 13,100 13,100

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

Qualified Transportation Fringe Benefit Limits

The 2017 monthly qualified transportation fringe benefit limitations as compared to 2016 are as follows:

  2017 2016
Parking and transit    $   255 $     255
Bicycle 20 20

Plan sponsors should update payroll and plan administration systems for the 2017 cost-of-living adjustments and should incorporate the new limits in relevant employee and participant communications.

For further information about the new IRS employee plan limits, contact Larry Ruff at [email protected], or call him at 312.670.7444 for assistance.

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