On November 6, 2019, the IRS released the 2020 cost of living adjustments (IRS Notice 2019-59) applicable to defined benefit and defined contribution plans (highlights below). Notably, the majority of all limits have increased from 2019.
Defined benefit plan annual limit
Defined contribution plan annual limit
Elective deferral limit for purposes of cash or deferred arrangements (401(k) plans) and tax-sheltered annuities (403(b) plans)
Maximum deferral limit for 457 plans
>Age 50 catch-up contribution limit to 401(k), 403(b) or 457(b) plans
Maximum deferral limit for SIMPLE plans
>Age 50 catch-up contribution limit to SIMPLE plans
Minimum compensation considered in determining eligibility for a SEP (simplified employee pension)
Threshold for highly compensated employee (HCE)
Key employee compensation limit for top heavy plan purposes
Annual compensation limit
Also see related IRS News Release: 401(k) contribution limit increases to $19,500 for 2020; catch-up limit rises to $6,500.
The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.
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