Last week, the IRS released Notice 2022-55 to announce cost-of-living adjustments to the indexed dollar limits applicable to retirement plans. For the second year in a row, the contribution and benefit limits will increase significantly. The chart below shows how the new limits compare to those of the previous two years.
| Code Section | Type of Limit | 2023 | 2022 | 2021 |
| 415(c)(1)(A) | Defined-Benefit Annual Benefit | $265,000 | $245,000 | $230,000 |
| 415(c)(1)(A) | Defined-Contribution Annual Contribution | $66,000 | $61,000 | $58,000 |
| 402(g)(1) | 401(k)/403(b) Elective Deferrals | $22,500 | $20,500 | $19,500 |
| 414(v)(2)(B)(i) | Catch-Up Contributions | $7,500 | $6,500 | $6,500 |
| 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) | Annual Compensation | $330,000 | $305,000 | $290,000 |
| 416(i)(1)(A)(i) | "Key Employee" for Top-Heavy Plan | $215,000 | $200,000 | $185,000 |
| 414(q)(1)(B) | "Highly Compensated Employee" | $150,000 | $135,000 | $130,000 |
Notice 2022-55 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.
Winston Takeaway: Plan sponsors should ensure the increased dollar limits are appropriately reflected in their payroll and plan administration programs for 2023.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
