2020 Retirement Plan Limits & PBGC Premiums
The Internal Revenue Service (IRS) announced retirement plan limits for 2020. In October, the Social Security Administration announced figures for 2020 and the Pension Benefit Guaranty Corporation (PBGC) announced premium rates for 2020.
The following description of these changes was prepared by Serena Simons, Senior Vice President and Retirement Compliance Practice Leader at Segal.
What You Need to Know
The following changes will go into effect in 2020:
- The 415(b) maximum annual payout (at age 62) from a defined benefit plan will increase by $5,000, to $230,000.
- The 415(c) annual defined contribution plan account maximum will increase by $1,000, to $57,000.
- The annual limit for elective deferrals in 401(k), 403(b) and 457(b) plans will increase by $500, to $19,500.
- The catch-up limit of $6,000 for those age 50 and older will increase by $500 to $6,500.
- All of the Social Security benefit tests and limits noted in the second table of the Update will increase.
- The PBGC premium for multiemployer plans will increase by $1 to $30.
- The PBGC’s variable-rate premium for private sector single-employer plans, the
per-participant cap on that premium and the PBGC guarantee will all increase.
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