
On October 26, 2020, the IRS released the 2021 cost of living adjustments (IRS Notice 2020-79) applicable to defined benefit and defined contribution plans (highlights below). The majority of these limits remain unchanged from 2020.
| 2021 | 2020 |
Defined benefit plan annual limit | $230,000 | $230,000 |
Defined contribution plan annual limit | $58,000 | $57,000 |
Elective deferral limit for purposes of cash or deferred arrangements (401(k) plans) and tax-sheltered annuities (403(b) plans) | $19,500 | $19,500 |
Maximum deferral limit for 457 plans | $19,500 | $19,500 |
>Age 50 catch-up contribution limit to 401(k), 403(b) or 457(b) plans | $6,500 | $6,500 |
Maximum deferral limit for SIMPLE plans | $13,500 | $13,500 |
>Age 50 catch-up contribution limit to SIMPLE plans | $3,000 | $3,000 |
Minimum compensation considered in determining eligibility for a SEP (simplified employee pension) | $650 | $600 |
Threshold for highly compensated employee (HCE) | $130,000 | $130,000 |
Key employee compensation limit for top heavy plan purposes | $185,000 | $185,000 |
Annual compensation limit | $290,000 | $285,000 |
Also see related IRS News Release: Income ranges for determining IRA eligibility change for 2021 (10/26/20).

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