Employee Benefits: IRS Announces 2018 Pension and Related Limitations

October 25, 2017

The Internal Revenue Service recently announced the dollar limitations for pension plans and other items beginning January 1, 2018. Some of the limits are listed below.




Maximum Annual Compensation taken into account for determining benefits or contributions to a qualified plan

$270,000 $275,000

Basic Elective Deferral Limitation for 401(k), 403(b) and 457(b) Plans1

$18,000 $18,500

Catch-up Contribution Limit for Persons Age 50 and older in 401(k), 403(b) or SARSEP Plans

$6,000 $6,000

Limitation on Annual Additions to a Defined Contribution Plan2

$54,000 $55,000

Limitation on Annual Benefits from a Defined Benefit Plan3

$215,000 $220,000

Highly Compensated Employee Compensation Threshold4

$120,000 $120,000

SEP Compensation Threshold

$600 $600

Social Security Taxable Wage Base for Social Security Tax (6.2%) For Medicare Tax (1.45% / 2.35%)

No Limit
No Limit

Health Savings Accounts:


• Individual Contribution Limit
• Family Contribution Limit
• Catch-Up Contributions



Health Flexible Spending Accounts5

$2,600 $2,650

If you have any questions about this memorandum, please contact any member of our Employee Benefits and Executive Compensation Practice Group listed below.

Buffalo: 716.416.7000
John C. Godsoe
Robert W. Patterson

Long Island: 516.267.6300
Terry O’Neil

New York City: 646.253.2300
Michael P. Collins

Rochester: 585.362.4700
John C. Godsoe

Syracuse: 315.218.8000
Stephen C. Daley
Brian K. Haynes
Aaron M. Pierce


1 This limit and the catch-up limit also apply to Roth (after-tax) contributions under 401(k) and 403(b) plans that permit such contributions.

2 In no event may annual additions exceed 100% of a participant’s compensation.

3 In no event may a participant’s annual benefit exceed 100% of the participant’s average compensation for the participant’s high three years.

4 Generally, an employee is considered “highly compensated” if the employee:

(a) was a five-percent owner of the employer at any time during the current or preceding year; or

(b) received compensation from the employer in the preceding year of more than the applicable dollar limit for that year.

5 This limit applies only to voluntary employee salary reduction (pre-tax) contributions.