The following is a summary of the 2015 cost-of living adjustments affecting pension plans and retirement accounts:

401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plans

  •  The elective deferral (contribution) limit increased from $17,500 to $18,000.
  • The catch-up contribution limit for employees aged 50 and over who participate in these plans increased from $5,500 to $6,000.

Individual Retirement Arrangements (IRAs)

  • The limit on annual contributions remains unchanged at $5,500.
  • The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.

Simplified Employee Pension (SEP) IRAs and Individual/Solo 401(k)s

  • Elective deferrals increase from $52,000 in 2014 to $53,000 in 2015, based on an increased annual compensation limit of $265,000, up from $260,000 in 2014.
  • The minimum compensation that may be required for participation in a SEP increases from $550 in 2014 to $600 in 2015.

SIMPLE (Savings Incentive Match Plan for Employees) IRAs

  • The contribution limit on SIMPLE IRA retirement accounts for 2015is $12,500, up from $12,000 in 2014.
  • The SIMPLE catch-up limit is $3,000, up from $2,500 in 2014.

Defined Benefit Plans

  • The basic limitation on the annual benefits under a defined benefit plan is unchanged at $210,000.

Other Changes

  • Highly – compensated and key employee thresholds: The threshold for determining “highly compensated employees” increases from $115,000 to $120,000 in 2015; the threshold for officers who are “key employees” remains at $170,000 for 2015.
  • Social Security Cost of Living Announcement: In a separate announcement, the Social Security Administration increased the Taxable Wage Base from $117,000 in 2014 to $118,500.
  • The maximum “Old Age, Survivor and Disability Insurance” (OASDI) tax will be $7,347 for both employer s and employees; and
  • Hospitalization Insurance (Medicare) tax continues to apply to all wages.