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2018 Qualified Plan LimitsNovember 2017

Qualified retirement plans, such as Internal Revenue Code sections 401(k) and 403(b) plans, pension and profit sharing plans, individual retirement accounts (IRAs), and health flexible spending accounts (Health FSAs) are subject to various dollar limits on the amount of contributions that can be made or benefits that may accrue under such arrangements. Most of these dollar limits are adjusted annually by the IRS for changes in the “cost of living.”

For 2018, some of the key dollar limits affecting the above plans, IRAs and Health FSAs are as follows:

Plan/IRA Benefit

2018 Dollar Limit

1.   Elective Deferral Contributions (for 401(k) and 403(b) Plans) $18,500 ($500 increase from 2017)
2.   Annual Contribution Limit (for defined contribution plans) $55,000 ($1,000 increase from 2017)
3.   Annual Benefit Limit (for defined benefit plans) $220,000 ($5,000 increase from 2017)
4.   Annual Compensation Limit (for all qualified retirement plans) $275,000 ($5,000 increase from 2017)
5.   Catch-Up Deferral Contributions (for plan participants age 50 or older under 401(k) and 403(b) plans) $6,000 (no change from 2017)
6.   Highly Compensated Employee definition-compensation threshold (for nondiscrimination testing under all qualified plans, especially 401(k) and 403(b) plans) $120,000 (no change from 2017)
7.   Traditional IRA Contribution Limit (IRA contribution deduction amount subject to income based phase-out) $5,500 (no change from 2017)
8.   Catch-Up Traditional IRA Contribution (for individuals age 50 or older) $1,000 (no change from 2017)
9.   Health FSA Contributions (via employee salary deferrals) $2,650 ($50 increase from 2017)

While the above benefit and contribution limits should be, as applicable, reflected in the plan documents for such plans and accounts, and in the operation of such arrangements, it is important to remember that the elective deferral and, as applicable, related catch-up contribution limits apply on an individual basis.  Thus, if you change jobs during calendar year 2018 and participate in two or more employer-provided 401(k) and/or 403(b) plans, you are entitled to a maximum aggregate elective deferral and catch-up contribution limit under all such plans for 2018 of $18,500 in elective deferrals and $6,000 in catch-up contributions (i.e., one set of elective deferral and catch-up contribution limits apply per individual per calendar year).

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New Jersey Legislature - Pending Legislation UpdateJanuary 2016

At the end of the last legislative session in New Jersey, there were still several proposed laws of which employers should be aware and that will likely be reintroduced in the next legislative session:

Paid Sick Leave - this proposed law would have required all businesses in New Jersey to provide five to ten paid sick days annually to each employee, accruing at a rate of one hour of sick leave for every thirty hours worked. This bill expired at the end of the legislative session but it will likely be re-introduced in 2016.

The Secure Choice Savings Program Act would automatically enroll workers of employers with 25 or more employees, and whose employers do not offer a 401k plan, into professionally managed retirement accounts at a 3% contribution from the worker. Although the Governor vetoed the bill conditionally, recommending it be a voluntary plan, this bill will likely be re-proposed in 2016.

Credit Check Prohibition - this proposed law would have prohibited employers from requiring or obtaining a credit report for a prospective or current employee with certain exceptions. The bill also provided a private cause of action for an aggrieved employee. The bill expired at the end of the legislative session but employers should expect it to be reintroduced.

In addition to reintroduction of the laws above in 2016, New Jersey employers can expect proposed laws in 2016 prohibiting local governments from requiring paid sick leave and from raising the minimum wage, as well as extending legal protections to interns similar to protections that exist to employees.

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