The Internal Revenue Service recently announced the new pension plan contribution limits for 2017. While there are many different limits that impact pension plans, the main limits that effect participants in the Ministers’ Retirement Plan are as follows:
- The salary reduction limit for 2017 will remain the same at $18,000. This limit is available to all participants regardless of age.
- The catch-up contribution for individuals age 50 or over will stay the same at $6,000 per year.
- The overall contribution limit for 2017, not taking into consideration the age 50 or over catch-up contribution provision, will increase by $1,000 to $54,000 annually.
- If a participant is 50 years of age or older, his or her maximum contribution limit in 2017 will be $60,000 after combining the regular limit with the catch-up limits. This level increased by $1,000 over the 2016 limits.
A contribution limit worksheet is available on our website for participants to use to calculate their maximum contributions for 2017.
It is important to remember that the old “20% of salary” limits are no longer applicable. Now the limits are strictly dollar limits as set out above. Further, regardless of the limits, a participant is always limited by the amount of their taxable income.