Compliance News | November 13, 2026
All indexed IRS dollar limits and thresholds for retirement plans will increase for 2027.
Retirement plan sponsors will need to make sure to incorporate the new maximums, limits and thresholds into their software programs or spreadsheets for 2027.
In 2027, the wage base for the Social Security tax will increase by just over 4 percent, and Social Security benefits will increase 3.6 percent.
The per-participant PBGC premium rates for DB plans subject to ERISA will be higher in 2027. Although the PBGC’s variable-rate premium for single-employer plans will not change, the per-participant cap on that premium will increase. The PBGC guarantee for single-employer plans will also increase.
On November 12, 2026, in Notice 2026-66, the IRS announced the 2027 dollar limits and thresholds for qualified plans and other tax-favored retirement plans. The table below compares some of the 2027 limits to those limits for 2026.
|
|
2026 |
2027 |
|
Maximum 415(b) annual payout at age 62 from a DB plan1 |
$290,000 |
$300,000 |
|
Maximum 415(c) annual addition to a DC plan account |
$72,000 |
$75,000 |
|
Annual elective 401(k), 403(b) and 457(b) deferral limit |
$24,500 |
$25,500 |
|
Annual 401(k) and 403(b) catch-up limit |
$8,000 |
$8,500 |
|
Annual 401(k) and 403(b) catch-up limit |
$11,250 |
$11,750 |
|
Wage threshold for determining whether catch-up contributions must be designated as Roth contributions3 |
$150,000 (2025 FICA wages) |
$155,000 (2026 FICA wages) |
|
Maximum 401(a)(17) annual compensation amount considered for qualified plans and 403(b) plans |
$360,000 |
$375,000 |
|
Maximum 401(a)(17) annual compensation amount considered for public sector plans that were able to grandfather the old dollar limit4 |
$535,000 |
$555,000 |
|
Annual 414(q) compensation threshold to identify highly compensated employees |
$160,000 |
$170,000 |
|
Annual 416 top-heavy compensation threshold to identify key employees |
$235,000 |
$245,000 |
|
Pension-linked emergency savings account (PLESA) limit5 |
$2,600 |
$2,700 |
|
Present value of projected financial assistance threshold for determining whether a multiemployer pension plan is systemically important6 |
$1,505,000,000 |
$1,576,000,000 |
1 There are late-retirement adjustments for benefits starting after age 65.
2 Under SECURE 2.0, plan sponsors may increase the catch-up limit for participants ages 60–63. For more information about these catch-up contributions see our September 22, 2025 insight.
3 This limit looks back at Federal Insurance Contributions Act (FICA) wages for the prior year. For more information on catch-up contributions that must be designated as Roth contributions, see our January 23, 2025 insight.
4 When the Omnibus Budget Reconciliation Act of 1993 reduced the annual compensation limit from $200,000 to $150,000, it allowed public sector plans to avoid applying the reduced compensation limit for grandfathered participants (generally, those who became participants in the plan before January 1, 1996). The grandfathered amount for 2027, as shown in the table above, is the 2026 amount as indexed under 401(a)(17).
5 For more information about PLESAs, see our January 18, 2024 insight and our February 7, 2024 insight.
6 The Multiemployer Pension Reform Act of 2014 introduced the term “systemically important multiemployer plan” for large, financially troubled pension plans whose insolvency would threaten the stability of the PBGC multiemployer insurance program.
The IRS dollar limits and thresholds for qualified plans and other tax-favored retirement plans are determined using Consumer Price Index (CPI) data. On October 14, 2026, the Bureau of Labor Statistics reported the CPI for All Urban Consumers increased 3.7 percent over the 12 months that ended September 30, 2026.
When designing retirement plan benefits, plan sponsors in the private sector generally consider Social Security benefits as a key part of their financial wellness programs because all private sector workers who are U.S. citizens or green card holders are covered by Social Security. In the public sector, some state and local government employees also participate in Social Security.
The Social Security cost-of-living adjustment (COLA) for 2027 will be 3.6 percent, an increase from the 2.8 percent COLA for 2026.
The Social Security wage base and earnings test will also increase for 2026.
Here’s how the 2027 figures compare to the 2026 figures:
|
|
2026 |
2027 |
|
Maximum amount of earnings subject to the Social Security tax1 |
$184,500 |
$192,300 |
|
COLA increase |
2.8% |
3.6% |
|
Social Security National Average Wage Index2 |
$69,846.57 |
$72,800.33 |
|
Primary Insurance Amount (PIA) formula:3 a) First bend point |
|
|
|
Maximum Social Security benefit at Social Security Normal Retirement Age (SSNRA)4 |
$4,152/month |
$4,188/month |
|
Early retirement earnings test prior to year of attaining SSNRA (amount that can be earned before benefits are cut)5 |
$24,480/year |
$25,560/year |
1 All earnings are subject to the Medicare tax.
2 This amount is not tied to the CPI-W, but rather to earnings as reported to the Social Security Administration (SSA). The 2025 average (which is relevant for 2027) and background is on the SSA website.
3 PIA formula “bend points” are updated each year to reflect changes in the National Average Wage Index. The 2027 bend points are on the SSA website.
4 The maximum Social Security benefit at SSNRA is not tied to the CPI. It is based on the PIA formula (reflecting updated bend points) where a worker’s earnings are at the maximum taxable amount for their career. For workers born in 1943–1954, the SSNRA is age 66. Information on how SSNRA varies by birth year is on the SSA website.
5 In the year of attaining SSNRA, the early retirement earnings test is higher. For those attaining SSNRA in 2027, the maximum amount that can be earned before benefits are cut will be $67,920 until the month of attaining SSNRA, up from $65,160 in 2026. This higher earnings test applies only to earnings in months prior to the month of SSNRA attainment. After attaining SSNRA, individuals can receive their full benefits regardless of how much they earn.
A press release on this news, a fact sheet on 2027 Social Security figures and information about how the COLA is calculated are on the Social Security Administration’s website.
On October 14, 2026, the PBGC published premium rates for 2027.
Based on indexing, the flat-rate premium for single employer plans will increase by $5. The variable-rate premium (VRP) per $1,000 of unfunded vested benefits for 2027 will be the same as for 2026 and the per-participant cap on the VRP will increase by just over 4 percent.
|
|
2026 |
2027 |
|
Flat-rate premium |
$111 |
$116 |
|
VRP per $1,000 of unfunded vested benefits |
$52 |
$52 |
|
Per-participant cap on the variable-rate premium VRP |
$751 |
$783 |
See the PBGC’s premium rates webpage for current and historical information.
The flat-rate, per-participant premium for multiemployer plans will increase by $2.
|
|
2026 |
2027 |
|
Flat-rate premium |
$40 |
$42 |
The PBGC’s premium rates webpage also includes information about how the premium for multiemployer plans has changed over time.
Multiemployer plans do not pay a variable-rate premium.
The PBGC single-life annuity maximum guarantee for participants in single-employer pension plans that terminate during 2027 will increase by 4.2 percent.
|
|
2026 |
2027 |
|
Guarantee limit per month |
$7,789.77 |
$8,113.64 |
|
Annual guarantee limit |
$93,477.24 |
$97,363.68 |
The PBGC’s monthly maximum guarantee webpage lists the monthly maximum at every age from 45 to 75.
The PBGC’s Multiemployer Benefit
There is no dollar limit on the monthly benefit payable under the multiemployer program, only a limit on the benefit rate used to calculate the monthly benefit. The PBGC’s multiemployer guarantee will not change because it is not indexed.
The maximum monthly PBGC guarantee for multiemployer plans is $35.75 per year of service, which means a participant with 30 years of service would receive, at most, a benefit of $1,072.50 per month.
For additional information, see the multiemployer benefit guarantees page of the PBGC website.
Before the end of this year, plan sponsors should:
Sponsors of 401(k), 403(b) and governmental 457(b) plans might wish to remind participants to increase their salary reduction amounts before the first paycheck of the new year to take advantage of any increase in the deferral and/or age 50+ catch-up deferral limits for 2027.
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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.