IRS announces 2015 COLA limits
The Internal Revenue Service has just announced the annual cost-of-living adjustments for 2015. Every year around this time, the financial industry, especially those in the retirement space, anxiously await these updates, particularly since they outline whether or not taxpayers will be able to contribute more to their retirement plans. Between 2013 and 2014, there was little change for elective contributions. Catch-up contributions, 401(k), SIMPLE, Roth and Traditional IRAs all stayed the same as well. However, things are definitely changing in 2015.
On October 23, 2014 the IRS announced the 2015 cost-of-living adjustments for the dollar limitations under qualified retirement plans, 403(b) plans and 457(b) governmental plans. The following reflects the 2015 limits and offers a comparison between 2014 limits where there is a difference.
Companies and Organizations should make an effort to update their employee communications to reflect these new limits, including their enrollment pieces and summary plan descriptions. While in most cases the limits are only increasing by $500, it is important to discuss these changes so employees can maximize their annual contribution.
About the Author
James Richardson is a Client Executive at WGA. As a member of the Employee Benefits Group he advises emerging and middle market life science, biotechnology and professional services companies on retirement plan matters.