|
Highlights
Impacted Employers: All employers sponsoring 401(k), 403(b), and 457 pension plans.
Effective Date: Jan. 1, 2026
Summary: Pension Plan Limitations for 2026 have been released by the IRS. The 401(k)-contribution limit is increased to $24,500. Any individual making $150,000 or more in FICA wages in 2025 must make catch-up contributions in 2026 on a post-tax basis (Roth).
Next Steps: Update applicable plan documents and summary plan descriptions and communicate 2026 limits to plan participants.
|
The Details:
On Nov. 13, 2025, the Internal Revenue Service (IRS) announced via Notice 2025-67, the cost-of-living adjustments applicable to dollar limitations for pension plans and other items for tax year 2026.
A summary of the 2026 pension limitations as compared to 2025 is below:
|
Plan Maximum Contribution Limits
|
2025
|
2026
|
|
Section 401(k) Plan or SAR SEP
|
$23,500
|
$24,500
|
|
Catch-up contributions (if age 50 or older) *
|
$7,500
|
$8,000
|
|
Catch-up contributions (individuals who attain age 60,61,62 or 63 in 2026) *
|
$11,250
|
$11,250
|
|
Roth (after tax catch-up contributions) threshold
|
$145,000
|
$150,000
|
|
Section 403(b) Plan
|
$23,500
|
$24,500
|
|
Section 408(p)(2)(E) SIMPLE Plan Contributions
|
$16,500
|
$17,000
|
|
Section 457(e)(15) Limit
|
$23,500
|
$24,500
|
|
Section 415 Limit for:
Defined Contribution Plans
Defined Benefit Plans
|
$70,000
$280,000
|
$72,000
$290,000
|
|
Highly Compensated Employees Section 414(q)(1)(B)
|
$160,000
|
$160,000
|
|
Key Employee Section 416(i)(1)(A)(i)
|
$230,000
|
$235,000
|
|
Includible Compensation –
Section 401(a)(17)
--------------------------------------------------------------------------
SEP Compensation
SEP Earnings Threshold
|
$350,000
$350,000
$750
|
$360,000
$360,000
$800
|
|
Limited Governmental Plans (pre 7/1/93)
|
$520,000
|
$535,000
|
|
Section 409 Employee Stock Ownership Plan Subject to 5-Year Distribution Period
Maximum Balance
Amount Used to Determine the Lengthening of the 5-Year Period
|
$1,415,000
$280,000
|
$1,455,000
$290,000
|
* For 2026, all catch-up contributions under section 414(v)(7)(A) to an applicable employer plan (other than a plan described in section 408(k) or (p)) must be designated as Roth contributions for individuals earning $150,000 or more in FICA wages in 2025.