2016 Qualified Plan Cost of Living Increases, 2016 Social Security Taxable Wage Base
By Mary Ellen Schill
October 21, 2015
Well, if you were hoping for a cost of living adjustment in the employee benefits part of your life, you aren’t going to get it from the 2016 qualified plan limits just issued by the IRS. Here are the new limits. Same as the old limits as you can see. According to the IRS, “the pension plan limitations will not change for 2016 because the increase in the cost-of-living index did not meet the statutory thresholds that trigger their adjustment.”
You see, to prevent having limits that aren’t in round numbers that benefits geeks have a hard time remembering, the cost of living adjustment provisions in the various tax code sections governing qualified plans include specified increments of adjustment, and more importantly provide for adjustment only when the cost of living adjustment would exceed the statutory threshold.
I agree, the IRS explained it better than I did!
So, let your payroll department (and your plan participants) know that the limits important to payroll will not increase for 2016.
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