IRS Announces 2027 Retirement Plan Limits

The Internal Revenue Service (IRS) announced the 2027 cost-of-living adjustments to various benefit and contribution limits applicable to retirement plans. The IRS modestly increased the applicable limits for 2027. The following limits apply to retirement plans in 2027:

  • The limit on elective deferrals under 401(k), 403(b), and eligible 457(b) plans increased to $25,500.
  • The limit on catch-up contributions by participants aged 50 or older is increased to $8,500. This means that the maximum amount of elective deferral contributions for those participants in 2027 is $34,000.
  • The enhanced catch-up contribution limit for those ages 60-63 in 2027 increased to $11,750. This means that the maximum amount of elective deferral contributions for these participants in 2027 is $37,250.
  • The Internal Revenue Code (Code) Section 415 annual addition limit is increased to $75,000 for 401(k) and other defined contribution plans, and the annual benefit limit is increased to $300,000 for defined benefit plans.
  • The limit on the annual compensation that can be taken into account by qualified plans under Code Section 401(a)(17) is increased to $375,000.
  • The dollar level threshold for becoming a highly compensated employee (HCE) under Code Section 414(q) is increased to $170,000 (which, under the look-back rule, applies to HCE determinations in 2028 based on compensation paid in 2027).
  • The dollar level threshold for becoming a key employee in a top-heavy plan under Code Section 416(i)(1) is increased to $245,000.
  • The Roth catch-up wage threshold is increased to $155,000 (which applies to determinations in 2027 based on FICA wages in 2026).

We have compiled a chart summarizing the key limits below, including how they compare with those in the previous years. For a printable version of the chart, please click here

COMPENSATION AND BENEFITS LIMITS
2027 2026 2025
401(k)/403(b) Plan Deferral Limit $25,500 $24,500 $23,500
Catch-Up Contributions (401(k), 403(b) & Governmental 457(b) Plans) $8,500

($11,750 for those ages 60-63)

 $8,000

($11,250 for those ages 60-63)

 $7,500

($11,250 for those ages 60-63)
Defined Contribution Dollar Limit $75,000 $72,000 $70,000
Defined Benefit Annual Limit $300,000 $290,000 $280,000
Pay Threshold for Determining Highly Compensated Employee $170,000 (for determinations in 2028) $160,000 (for determinations in 2027) $160,000 (for determinations in 2026)
Annual Compensation Limit $375,000 $360,000 $350,000
457(b) Plan Deferral Limit $25,500 $24,500 $23,500
Wage Threshold for Roth Catch-up Contributions $155,000 (of FICA wages in 2026 for determinations in 2027) $150,000 (of FICA wages in 2025 for determinations in 2026) N/A
Social Security Taxable Wage Base $192,300 $184,500 $176,100

Contact your Faegre Drinker benefits attorney with questions or for assistance with implementing the new retirement plan limits.

IRS Clarifies When Retirement Plans Must Be Updated for SECURE and SECURE 2.0

Most plan sponsors have treated December 31, 2026, as the deadline for adopting plan amendments under the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) and the SECURE 2.0 Act of 2022 (SECURE 2.0). On September 18, 2026, the Internal Revenue Service (IRS) clarified in its Employee Plans newsletter that the deadline depends on whether an amendment is required or discretionary.

Certain required amendments follow the IRS Required Amendments List (RA List) process and will have deadlines after 2026. Discretionary amendments generally remain subject to the December 31, 2026, deadline.

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Treasury and IRS Issue Sample Rollover Forms under SECURE 2.0

On August 12, 2026, the Treasury Department and the Internal Revenue Service (IRS) released Notice 2026-49, providing the first formal guidance under the SECURE 2.0 Act on simplifying and standardizing the rollover process for qualified retirement plans. Below are key takeaways for retirement plan sponsors.

Background

Section 324 of the SECURE 2.0 Act directed the Treasury Department to develop sample forms and procedures designed to simplify and standardize rollovers to eligible retirement plans and trustee-to-trustee transfers from individual retirement plans. The guidance responds to longstanding concerns that the rollover process has been inefficient, inconsistent, and overly burdensome for participants. Please note that the sample forms are not intended to be used for IRA-to-IRA rollovers or transfers but may be used for rollovers to or from an IRA.

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Does Your Retirement Plan Need an Amendment for Saver’s Match?

Recently issued IRS Notice 2026-48 provides initial guidance on the Saver’s Match created by SECURE 2.0 largely to replace the current Saver’s Tax Credit. Under the Saver’s Match, beginning in 2027, eligible taxpayers with a maximum modified adjusted gross income (MAGI) of $35,000 ($71,000 for married filing jointly) are eligible to receive a matching contribution equal to 50% (reduced across a phaseout range as MAGI increases) of qualified retirement savings contributions up to $2,000. Qualified retirement savings contributions include contributions made by the taxpayer to a traditional or Roth IRA, elective deferrals to a 401(k), 403(b), or governmental 457(b) plan, SIMPLE 401(k) or IRA, SEP, and certain other specified contributions. Taxpayers will claim the Saver’s Match on a form filed with their tax return.

The Saver’s Match will be made by the Treasury Department directly to the plan or IRA, with the first match paid in 2028. The plan or IRA will treat the Saver’s Match as a pretax elective deferral contribution.

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Seventh Circuit Splits with Sister Circuits, Rules Employers Entitled to Full Credit for Prior Partial Withdrawal Liability

On September 17, 2026, the US Court of Appeals for the Seventh Circuit handed employers a significant win in Central States, Southeast and Southwest Areas Pension Fund v. Consumers Concrete Corp., No. 25-1765, affirming a district court ruling that rejected a multiemployer pension fund’s $23 million withdrawal liability assessment. The decision deepens a growing disagreement among the federal circuits over how to implement the standards under the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA) for applying an employer’s credit for a prior partial withdrawal liability assessment against the later calculation of the employer’s liability for a complete withdrawal, and it carries real financial consequences for employers that contribute to multiemployer pension plans.

Case Background and Holding

Consumers Concrete Corp. was a contributing employer to the Central States, Southeast and Southwest Areas Pension Fund. In 2017, Consumers Concrete partially withdrew from the Fund and was assessed approximately $11.3 million in partial withdrawal liability. Two years later, in 2019, the company completely withdrew from the Fund and was assessed roughly $22.9 million in complete withdrawal liability.

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What Employers Need To Know About Trump Account Contribution Programs

On August 11, 2026, the IRS published proposed regulations providing guidance on employer contributions to Trump Accounts under new Section 128 of the Internal Revenue Code. The regulations are only proposed and would not take effect until the plan year following the year in which these regulations are finalized (thus, 2027 at the earliest). Employers can rely on the proposed regulations in the meantime. Issues discussed below may change before the guidance is finalized.

Background

A Trump Account contribution program is a separate written plan maintained by an employer for the exclusive benefit of its employees, providing contributions to the Trump Accounts of employees or the employees’ dependent(s). There are two main types of contributions: (1) contributions elected by the employee, potentially on a pretax basis, and (2) contributions made by the employer, also potentially on a pretax basis.

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Third Circuit Holds That 401(k) Fiduciaries’ Good Process Defeats Claims of Imprudence

This decision affirms some key ERISA concepts that fiduciary committee members should consider and defendants should emphasize in nearly every lawsuit alleging fiduciary imprudence. The most important principle is that ERISA was designed to grant fiduciaries discretion in making decisions and to defer to fiduciaries who employ a good process.

To view the full alert, visit the Faegre Drinker website.

New Proposed Rules Would Allow Employers to Offer Fertility Benefits as “Excepted Benefits” Outside Their Major Medical Plans

On May 13, 2026, the Departments of Treasury, Labor, and Health and Human Services jointly published proposed regulations that would establish a new category of “limited excepted benefits” for fertility-related coverage under Employee Retirement Income Security Act of 1974 (ERISA), the Internal Revenue Code, and the Public Health Service Act. If finalized, these rules would create a streamlined pathway for employers to offer separate fertility coverage (on an insured or self-insured basis) to employees who are not otherwise enrolled in the employer’s primary group health plan. The fertility “excepted benefits” would be generally exempt from Affordable Care Act’s mandates (such as requirements to cover certain preventive care services), HIPAA portability rules, the No Surprises Act, and certain other federal mandates that apply to traditional group health plans. If finalized, the regulations would be effective for plan years beginning on or after January 1, 2027.

What the Proposed Rules Would Do

The proposed regulations would permit employers to offer fertility benefits — covering diagnosis, mitigation, or treatment of infertility or infertility-related reproductive health conditions — as a standalone insured or self-insured benefit separate from major medical coverage. Covered services could include diagnostic lab tests, imaging, hormone panels, in vitro fertilization (IVF), intrauterine insemination (IUI), fertility medications, surgical procedures, and preconception care.

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Minnesota Secure Choice: What Employers Need to Know as Compliance Deadlines Approach

Minnesota’s Secure Choice Retirement Program requires employers doing business in Minnesota to either enroll workers in the state’s payroll‑deduction IRA program or, if the employer already offers a qualifying retirement plan (e.g., a 401(k), 403(b), SEP, or SIMPLE), to certify its exemption from that requirement by the end of the employer’s assigned registration window. All employers with 100+ covered employees must set up a Minnesota Secure Choice Employer Account by June 30, 2026, and either enroll their workers in the state’s payroll‑deduction IRA program or certify their exemption by the required date. Noncompliant employers face graduated fines of up to $500 per employee after an initial warning period.

Who Is a “Covered Employer”?

The Secure Choice Retirement Program applies to any private-sector employer that has been doing business in Minnesota for at least 12 months and employs five or more covered employees receiving Minnesota taxable wages. Temporary or seasonal employees expected to work 180 days or less are excluded from the count.

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DOL Takes Aim at Proxy Advisory Services—What Plan Fiduciaries Need to Know About Technical Release 2026-01 and Their Fiduciary Duties Related to Proxy Voting

President Trump is strongly critical of proxy advisory services and last year directed several federal agencies — including the Department of Labor (DOL) and the Securities and Exchange Commission (SEC) — to do something about it. In his December 11, 2025, executive order, President Trump stated that “proxy advisors regularly use their substantial power to advance and prioritize radical politically-motivated agendas — like ‘diversity, equity, and inclusion’ and ‘environmental, social, and governance’ — even though investor returns should be the only priority.1

Even before the executive order, DOL’s Employee Benefits Security Administration (EBSA) drew a legal “line in the sand” regarding what one of its officials termed “politicized investing,”2 reminding plan fiduciaries that ERISA does not permit them to “subordinate the interests of the participants and beneficiaries in their retirement income or financial benefits under the plan to other objectives.”3 More recently, EBSA Assistant Secretary Daniel Aronowitz announced that EBSA will prioritize civil investigations involving breaches “of the duty of loyalty [including self-dealing and conduct promoting] goals unrelated to participants’ best interests, such as the promotion of environmental, social, or governance objectives.”4

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