2022 Cost of Living Adjustments
By Louis F. LiBrandi, EA, CEBS, ChFC, TGPC, Principal
Plan sponsors should review the cost of living adjustments (COLAs) to determine what, if any, changes need to be communicated to employees by means of orientation meetings and enrollment forms. In addition, the amounts may need to be updated and/or input into the payroll or other human resources information systems used by the employer to monitor contributions made to an employee benefit plan.
The table below contains the dollar limitation for retirement plans and other benefit plan limits and thresholds for the 2020 through 2022 tax years. Similar to other years, some of the amounts have changed and others remained the same as the prior year.
Cost of Living Adjustments | Limits | ||
Retirement Plans | 2022 | 2021 | 2020 |
402(g) Elective Deferrals. Maximum salary-reduction contribution; 401(k), 403(b) and 457(b) plans. | $20,500 | $19,500 | $19,500 |
Catch-up Contributions. Age 50 or older additional salary reduction contributions; 401(k), 403(b), government 457(b) plans. | $6,500 | $6,500 | $6,500 |
401(a)(17) Compensation Limit. Ceiling for using compensation to determine benefits in a qualified retirement plan. | $305,000 | $290,000 | $285,000 |
415(c) Maximum dollar amount for a defined contribution plan (excludes catch-up). | $61,000 | $58,000 | $57,000 |
Highly Compensated Employee (HCE). Compensation earned in a prior year is used to determine if a participant is a HCE. | $135,000 | $130,000 | $130,000 |
Key Employee. Minimum compensation for an officer to be treated as a ‘’key employee.” | $200,000 | $185,000 | $185,000 |
Social Security Wage Base | 2022 | 2021 | 2020 |
Social Security Taxable Wage Base. | $147,000 | $142,800 | $137,700 |
Welfare Plans | 2022 | 2021 | 2020 |
Health FSA Contribution Limit. | $2,750 | $2,750 | $2,750 |
HSA Contribution Limit – Single. | $3,650 | $3,600 | $3,550 |
HSA Contribution Limit – Family. | $7,300 | $7,200 | $7,100 |
Catch-up Contributions. | $1,000 | $1,000 | $1,000 |
Contact Us
The Employee Benefit Services Group at PKF O’Connor Davies is available to assist plan sponsors in meeting the various compliance requirements applicable to their plan. We also provide a full spectrum of compliance services for qualified retirement plans, nonqualified deferred compensation plans, and welfare plans. For more information, please contact your client services partner or either of the following:
Timothy J. Desmond, CPA
Partner
Director of Employee Benefit Services
tdesmond@pkfod.com | 551.249.1728
Louis F. LiBrandi, EA, CEBS, ChFC, TGPC
Principal
Employee Benefit Services Group
llibrandi@pkfod.com | 646.449.6327