The maximum contribution that can be made to 401(k) plans in 2015 will rise to $18,000, up from the current $17,500 limit, while the maximum catch-up contribution employees age 50 and older can make to the plans will increase to $6,000, up from $5,500, the Internal Revenue Service announced Thursday.
The IRS also said the amount of employee compensation that can be considered in calculating pension benefits and contributions to defined contribution plans will rise to $265,000 from $260,000.
Additionally, the definition of a highly compensated employee for 401(k) plan nondiscrimination testing purposes will be one who earns at least $120,000 next year, up from $115,000.
The maximum annual benefit that can be funded through a defined benefit plan for a plan participant will remain at $210,000.
The 2015 limits, which reflect a methodology set by federal law, are based on increases in the cost of living.