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11/14/2023

IRS Drops New Retirement Plan Limits for 2024

Source: Fisher Phillips, November 6, 2023

Employees can contribute more pre-tax dollars next year to their retirement savings accounts, including 401(k) and 403(b) plans, according to an IRS announcement made on November 1. Your eligible workers will be able to defer up to $23,000 in 2024 – which is $500 more than the current 2023 limit. You can read more about the 2024 benefits limits for retirement and health savings plans by clicking the link below, but before you do, we want to remind you to consider taking these six steps as you prepare for the next plan year:

1. Update programs to ensure any plan materials and participant communications reflect the new limits.
2. Educate your employees on the new limits and give them an opportunity to boost their participation.
3. Communicate with your payroll department or provider, as well as your administrative services provider, to ensure the new limits are taken into account when determining contributions.
4. Train your payroll, benefits, and relevant human resources staff on these plan limit changes and ensure they know how these changes will impact plan administration.
5. Confirm that your retirement plans comply with the applicable limits when processing employee contributions and testing for discrimination issues, where applicable. Nondiscrimination testing is required for certain plans to ensure that highly compensated employees (HCE) do not disproportionately benefit from employer retirements plans and that contribution limits are not exceeded.
6. Keep written documentation on any plan updates, employee education and training, communications with third-party providers, and any other plan actions or decisions as part of your fiduciary responsibilities.

View the Benefits Limits Guide