USA: IRS contribution limits for 401(k) plans unchanged for 2016
The maximum pretax contribution U.S. employees can make to their 401(k) plans in 2016 will remain at USD 18,000, unchanged from 2015.
Other parameters such as the maximum catch-up contribution older employees can make to a plan (USD 6,000), the amount of employee compensation that can be considered in calculating pension benefits and contributions to DC plans (USD 265,000), the definition of a highly compensated employee for nondiscrimination testing (USD 120,000) and the maximum annual benefit that can be funded through a DB plan (USD 210,000 per participant) do not change either.
The 2016 limits are not political decisions but the result of a computation based on inflation. The latest published inflation rate for the United States is 0.0% (12 months to September 2015).