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Retirement and Health & Welfare Plan Contribution and Benefit Limits Announced for 2024

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Blog

Retirement and Health & Welfare Plan Contribution and Benefit Limits Announced for 2024

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2 Min Read

Authors

Joseph S. AdamsDavid RogersAmy GordonAbby Brothers Grace Vorbrich

Related Topics

Benefits Bulletin

Related Capabilities

Labor & Employment

November 2, 2023

Retirement Plans:

The IRS recently released Notice 2023-75 to announce cost-of-living adjustments to the indexed dollar limits applicable to retirement plans. Increases are more moderate than in recent years, with the limit on catch-up contributions remaining the same from 2023 to 2024. The chart below shows how the new limits compare to those for 2023.

TYPE OF LIMIT

2024

2023

Defined Benefit Annual Benefit

$275,000

$265,000

Defined Contribution Annual Contribution

$69,000

$66,000

401(k)/403(b) Elective Deferrals

$23,000

$22,500

Catch-Up Contributions

No change

$7,500

Annual Compensation

$345,000

$330,000

“Key Employee” for Top-Heavy Plan

$220,000

$215,000

“Highly Compensated Employee”*

$155,000

$150,000

Social Security Wage Base

$168,600

$160,200

Notice 2023-75 also includes changes to other limits, including increases that apply to employee stock ownership plans, governmental plans, IRAs, and multiemployer plans, which are not reflected in the chart above.

Health & Welfare Plans:

The IRS has also released Rev. Proc. 2023-23, which provides the inflation-adjusted limits related to health savings accounts (HSAs) and high deductible health plans (HDHPs) for the 2024 calendar year. The chart below compares the 2024 and 2023 limits.

TYPE OF LIMIT

2024

2023

HSA Annual Contribution Limit

$4,150 (self only)
$8,300 (family)

$3,850 (self only)
$7,750 (family)

HSA Catch-Up

No change

$1,000

HDHP Minimum Annual Deductible

$1,600 (self only)
$3,200 (family)

$1,500 (self only)
$3,000 (family)

HDHP Annual Out-of-Pocket Max

$8,050 (self only)
$16,100 (family)

$7,500 (self only)
$15,000 (family)

Health Care FSA Annual Max Contribution**

TBD

$3,050

Health Care FSA Carryover Limit**

TBD

$610

Dependent Care FSA Annual Max Contribution

No change

$5,000 (married or single employee)
$2,500 (married, filing separately)

Qualified Transportation Fringe Benefit & Qualified Parking (monthly limit)**

TBD

$300

Winston Takeaway: Plan sponsors should ensure the increased dollar limits are appropriately reflected in their payroll and plan administration programs for 2024 and included in annual and other required communications to plan participants.

Grace Vorbrich, Law Clerk, co-authored this blog post.


*  Whether an employee is a “highly compensated employee” in a given year is based on the employee’s compensation earned during, and using the limit applicable for, the preceding year, so an individual will be a highly compensated employee in 2025 if he or she earns $155,000 in 2024.

** New limits for 2024 are yet to be announced.

Related Professionals

Related Professionals

Joseph S. Adams

David Rogers

Amy Gordon

Abby Brothers

Joseph S. Adams

David Rogers

Amy Gordon

Abby Brothers

This entry has been created for information and planning purposes. It is not intended to be, nor should it be substituted for, legal advice, which turns on specific facts.

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