COST-OF-LIVING ADJUSTMENTS 2015

COST-OF-LIVING ADJUSTMENTS - 2015

Pension Plan and Related Limits	2014	2015
Pre-tax elective deferral maximum under IRC § 401(k), 403(b), and 457(b) plans	$17,500	$18,000
Age 50 and older “catch-up” adjustment for 401(k), 403(b), and governmental 457(b) plans and SEPs	$5,500	$6,000
Annual compensation limit under IRC §§ 401(a)(17), 404(l) and 408(k)	$260,000	$265,000
Annual benefit limit for defined benefit plans under IRC § 415(b)	$210,000	$210,000
Annual contribution limit for defined contribution plans under IRC § 415(c)	$52,000	$53,000
Highly compensated employee threshold for purposes of testing in the following year under IRC § 414(q)(1)(B)	$115,000	$120,000
Key employee threshold for top heavy plan under IRC § 416(i)	$170,000	$170,000
IRC § 430(c)(7)(D)(i)(II) amount for determining excess employee compensation for single-employer defined benefit plans where election has been made	$1,084,000	$1,101,000
ESOP account balance for five-year and one-year distribution rule under IRC § 409(o)(1)(C)(ii)	$1,050,000 and $210,000	$1,070,000 and $210,000
SEP pension compensation threshold under IRC § 408(k)	$550	$600
SIMPLE plan elective deferral limit under IRC § 408(p)(2)(E)	$12,000	$12,500
SIMPLE plan age 50 catch-up	$2,500	$3,000
Basic IRA/Roth IRA contribution limitation under IRC § 219(b)/§ 408A (age 50 $1,000 catch-up for IRAs does not have cost-of-living adjustment)	$5,500	$5,500
Phase-out for deductions for IRA for married couples filing jointly, in which the spouse who makes the IRA contribution is an active participant in an employer-sponsored retirement plan	$96,000 to $116,000	$98,000 to $118,000
Adjusted gross income (AGI) phase-out range for married joint filers taxpayers making contributions to a Roth IRA	$181,000 to $191,000	$183,000 to $193,000
AGI limit for retirement savings contributions (saver's) credit for married couples filing jointly	$60,000	$61,000
Health Savings Account contribution limits (single and family)	$3,300 and $6,550	$3,350 and $6,650
Maximum monthly benefit guarantee by PBGC	$4943.18	$5,011.33
PBGC flat-rate premium for a single-employer plans (as amended by MAP-21 2012 legislation)	$49	$57
Taxable wage base subject to FICA tax	$117,000	$118,500

Rollover Safe Harbors

Regulations provide that where a plan accepts a rollover contribution it will be treated for purposes of the qualification rules as a valid rollover contribution as long as the following two conditions are satisfied.  First, the plan administrator reasonably concludes that the contribution is a valid rollover contribution. Second, if the plan administrator of the receiving plan later determines that the contribution was an invalid rollover contribution, the amount of invalid contribution plus earnings must be distributed to the employee. Treas. Reg. § 1.401(a)(31)-1, Q & A 14(a).

For purposes of the first condition that the plan administrator must reasonably conclude that the contribution is a valid rollover contribution, the regulations note that while evidence of a favorable IRS determination letter is useful in concluding that the contribution is a valid rollover contribution, a determination letter is not necessary to conclude that the contribution is a valid rollover contribution.  Treas. Reg. § 1.401(a)(31)-1, Q & A 14(a).

The regulations give various examples where the plan administrator of the receiving plan may conclude that the contribution as a valid rollover contribution.  For example, a letter from plan administrator of distributing plan that it has a favorable IRS determination letter can be relied upon to conclude there is a valid rollover contribution.  Treas. Reg. § 1.401(a)(31)-1, Q & A 14(c), Ex. 1.  Alternatively, a letter from the plan administrator of the distributing plan representing that the plan is qualified and that the plan administrator is not aware of anything that would result in disqualification could also be relied upon.  Treas. Reg. § 1.401(a)(31)-1, Q & A 14(c), Ex. 2.  

According to a 2014 revenue ruling, a plan administrator of the receiving plan may rely on the fact that Line 8a of Form 5500 for distributing plan, available on www.efast.dol.gov, (or Line 9 of Form 5500-SF) does not include Code 3c for a nonqualified plan for reliance that the contribution is a valid rollover contribution.  Rev. Rul. 2014-9, Situation 1.

Similarly with regard to a rollover from a traditional IRA a check from the trustee payable to the receiving plan that indicates on the pay stub that it is an IRA of the employee (and the employee certifies that there are no after-tax amounts and the employee is not age 70-1/2), the plan administrator may conclude that the contribution from the IRA is a valid rollover contribution.  Rev. Rul. 2014-9, Situation 2.