IRS Announces New Pension Limits for 2022
As you know, your company sponsors a Qualified Retirement Plan. The Internal Revenue Code provides for dollar limitations on benefits and contributions under qualified retirement plans. Code Section 415 requires the limits to be adjusted annually for cost-of-living increases.
We are very excited to inform you that the Internal Revenue Service has just announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for the 2022 Tax Year. In general, many of the pension plan limitations will change for 2022 because the increase in the cost-of-living met the statutory thresholds that trigger their adjustment.
They are as follows:
Annual Compensation Limit | $305,000 | (was $275,000) |
Employee Deferral Limit | $20,500 | (was $18,500) |
Catch-up Deferral Limit | $6,500 | (was $6,000) |
Defined Contribution Plan Limit | $61,000 | (was $55,000) |
Highly Compensated Employee | $135,000 | (was $120,000) |
Defined Benefit Plan Limit | $245,000 | (was $220,000) |
Social Security Taxable Wage Base | $147,000 | (was $128,400) |
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2022 Pension Limits, IRS, Pension Limits