IRS Announces 2020 Pension Limits
The IRS has announced cost-of-living (COLA) adjustments to various pension limits that will apply in 2020. The maximum annual benefit payable under a defined benefit plan has increased to $230,000, and there was a modest increase of $500 in the elective deferral limit under a 401(k) plan or 403(b) plan for 2020. Several key 2020 pension limits, as well as the Social Security taxable wage base, are noted in the chart below, along with prior years' limits.
|
Limit |
2020 |
2019 |
2018 |
| Maximum Annual Pension Benefit | $230,000 | $225,000 | $220,000 |
| Maximum Contribution to a DC Plan | $57,000 | $56,000 | $55,000 |
| Maximum Elective 401(k), 403(b) and 457 Deferrals | $19,500 | $19,000 | $18,500 |
| Qualified Plan Compensation Limit | $285,000 | $280,000 | $275,000 |
| Social Security Taxable Wage Base | $137,700 | $132,900 | $128,400 |
View Notice 2019-59 for additional 2020 IRS limitation adjustments. For Social Security changes including the Taxable Wage Base, refer to the 2020 Social Security Changes Fact Sheet.
If you have any questions about these or other limits or about the impact on your plan, please contact your Cheiron consultant.
Cheiron is an actuarial consulting firm that provides actuarial and consulting advice. However, we are neither attorneys nor accountants. Accordingly, we do not provide legal services or tax advice.