The Internal Revenue Service (IRS) has released its 2024 cost-of-living adjustments are applicable to employee benefit plans, was released for 2024. A year-to-year comparison of limitations can be found here: 2024 Annual Limitations Chart.

The IRS generally adjusts the employee benefit plan contribution limits for inflation and, as in prior years, the IRS increased the limits based on a cost-of-living index. This includes increases to the qualified retirement plan limitations. The contribution limit (section 415 limitation) for defined contribution plans increased from $66,000 to $69,000. Additionally the annual compensation limit for purposes of Internal Revenue Code Section 401(a)(17) increased from $330,000 to $345,000 (from $490,000 to $505,000 for certain governmental plans). The limits on elective deferrals to 401(k) plans also increased, from $22,500 to $23,000. Conversely, the catch-up contribution limit stayed stagnant at $7,500.

The IRS also increased certain limits applicable to health and welfare plans. For example, the maximum annual contribution to a health savings account increased from $3,850 to $4,150 for single filers, and from $7,750 to $8,300 for families. Limits on reimbursements under Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs) increased from $5,850 to $6,150 for self-only coverage and $11,800 to $12,450 for family coverage.

The Social Security wage base increased from $160,200 to $168,600, a much smaller increase compared to last year.