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Abstract
Many inflation-sensitive retirement plan contribution benefit limits will rise in 2018, after remaining flat for several years, the IRS announced. However, some limitation amounts will not change because of rounding computations. The 2018 cost of living adjustments (COLA) affect a wide range of retirement savings vehicles, including defined contribution plans, defined benefit plans, employee stock ownership plans, and individual retirement arrangements. Code Sec. 415 provides both dollar limitations on benefits and contributions under qualified retirement plans, along with a requirement that the IRS annually adjust these limits to reflect increases in the cost of living. With the release of the yearly adjustment, plan sponsors are encouraged to update payroll and plan administration systems to reflect new COLA limits. The 2018 adjustments provided by the IRS cover over 25 categories.