An Internal Revenue Service announcement on the maximum contribution that can be made to 401(k) plans, which was delayed by the 16-day partial government shutdown, is expected next week, a benefit consultant said.
On Oct. 30, the Labor Department will release the September increase in the Consumer Price Index. “We expect announcements the same day of Social Security cost-of-living adjustments, taxable wage base and (Internal Revenue Code) retirement plan limits, including 401(k) elective deferral limits,” Mercer said in a newsletter.
Those increases are based on the one-year rise in the Consumer Price Index for the 12-month period ending Sept. 30.
In 2013, the maximum annual contribution an employee can make through salary reduction to a 401(k) plan is $17,500, while the maximum catch-up contribution employees age 50 and older can make to 401(k) plans is $5,500.
In addition, in 2013, the maximum annual benefit that can be funded through a defined benefit plan for a plan participant is $205,000, while the amount of employee compensation that can be considered in calculating pension benefits is $255,000.