--- title: New Qualified Plan Limits and Social Security Adjustments for 2020 Announced description: Here are the updated qualified retirement plan limits, PBGC premium rates, and Social Security benefits for 2020 announced recently. image: https://blog.acgworldwide.com/hubfs/Cost%20of%20Living%20Picture%20-%202018%20COLA%20Blog-4.jpg --- [![acg-logo-header.png](https://blog.acgworldwide.com/hs-fs/hubfs/acg-logo-header.png?width=123&name=acg-logo-header.png "acg-logo-header.png")](http://www.acgworldwide.com/) - [Who We Are](http://www.acgworldwide.com/about-acg/) - [Selected Staff Bios](http://www.acgworldwide.com/selected-staff-bios/) - [Culture and Philosophy](http://www.acgworldwide.com/culture-and-philosophy/) - [Advisory Board Members](http://www.acgworldwide.com/advisory-board-members/) - [What We Do](http://www.acgworldwide.com/our-services/) - [Wealth Management](http://www.acgworldwide.com/wealth-management/) - [Investment Advisory](http://www.acgworldwide.com/investment-advisory-services/) - [Third Party Administration](http://www.acgworldwide.com/third-party-administration/) - [Retirement Plan Consulting](http://www.acgworldwide.com/401k/) - [Financial Planning Services](http://www.acgworldwide.com/financial-planning-services/) - [Tax Strategies](http://www.acgworldwide.com/tax-strategies/) - [Who We Help](http://www.acgworldwide.com/our-clients/) - [Businesses](http://www.acgworldwide.com/businesses/) - [Entrepreneurs](http://www.acgworldwide.com/entrepreneurs/) - [Individuals and Families](http://www.acgworldwide.com/successful-individuals-and-families/) - [Foundations and Endowments](http://www.acgworldwide.com/foundations-and-endowments/) - [Press & Resources](http://www.acgworldwide.com/acg-live/) - [Blog](http://www.acgworldwide.com/blog/) - [Company News](http://www.acgworldwide.com/company-news/) - [CBS 6 News Market Briefs](http://www.acgworldwide.com/company-news/bill-fitzgerald-of-cbs-6-news-interviews-with-sandy-wiggins/) - [Monthly Investor Insights](https://blog.acgworldwide.com/topic/monthly-insights) - [Quarterly Commentary](http://www.acgworldwide.com/commentary/) - [Cost of Living Adjustments](http://www.acgworldwide.com/colas-and-limits/) - [Important Disclosures](http://www.acgworldwide.com/acg-live/website-disclosure/) - [Contact Us](http://www.acgworldwide.com/contact-us/) [![Richmond Virginia](https://blog.acgworldwide.com/hs-fs/hubfs/ACG_June2016/images/ACGLogo_KOHi.png?width=280&height=112&name=ACGLogo_KOHi.png "Richmond Virginia")](http://www.acgworldwide.com/) [![BlogImage_PiggyBank](https://blog.acgworldwide.com/hs-fs/hubfs/BlogImage_PiggyBank.jpg?width=5472&name=BlogImage_PiggyBank.jpg "BlogImage_PiggyBank")](http://www.acgworldwide.com/colas-and-limits/) # ACG Blog # New Qualified Plan Limits and Social Security Adjustments for 2020 Announced By [David J. Kupstas, FSA, EA, MSEA](http://www.acgworldwide.com/selected-staff-bios/david-kupstas/) - [Tweet](https://twitter.com/share) ![David J. Kupstas, FSA, EA, MSEA](https://blog.acgworldwide.com/hubfs/David-Kupstas-square-4.jpg) David J. Kupstas, FSA, EA, MSEA Chief Actuary Retirees receiving Social Security will see a small benefit increase in 2020.  Savers in qualified retirement plans (but not IRAs) will have the ability to put a bit more money away in 2020. Those are the main takeaways from recent announcements by the [IRS](https://www.irs.gov/), [Pension Benefit Guaranty Corporation (PBGC)](https://www.pbgc.gov/), and [Social Security Administration (SSA)](https://www.ssa.gov/) regarding the annual increases (or not) in benefits, limits, premium rates, and more. ## **Most IRS Limits Will Again Increase by One Step**  According to [Notice 2019-59](https://www.irs.gov/pub/irs-drop/n-19-59.pdf), these limits will rise in 2020: - The elective deferral limit under §402(g)(1) for 401(k) and certain other plans is increased from $19,000 to $19,500. - The annual addition limitation for defined contribution plans under §415(c)(1)(A) is increased from $56,000 to $57,000. - The dollar limitation under §414(v)(2)(B)(i) for catch-up contributions to 401(k) plans for individuals aged 50 or over is increased from $6,000 to $6,500. Given the 415(c) increase to $57,000, this means there is effectively an annual addition limit of $63,500 for some participants 50 and older. - The annual [compensation](https://blog.acgworldwide.com/compensation-whats-in-a-name) limit under §§401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $280,000 to $285,000. - The limitation used in the definition of “highly compensated employee” under §414(q)(1)(B) is increased from $125,000 to $130,000. Note that this will affect the determination of [Highly Compensated Employees](https://blog.acgworldwide.com/highly-compensated-employee-defined) for the 2021 plan year since HCE status is based on previous year’s pay.  HCE status for 2020 will be based on the 2019 compensation threshold of $125,000. - The limitation on the annual benefit under a [defined benefit plan](https://blog.acgworldwide.com/for-big-tax-deductible-contributions-consider-a-defined-benefit-plan) under §415(b)(1)(A) is increased from $225,000 to $230,000. - The deferral limitation under §408(p)(2)(E) for SIMPLE plans is increased from $13,000 to $13,500. - The dollar limitation under §416(i)(1)(A)(i) concerning the definition of “key employee” in a [top-heavy plan](https://blog.acgworldwide.com/top-heavy-retirement-plan) is increased from $180,000 to $185,000. These limits will remain at their 2019 levels: - The dollar limitation under §414(v)(2)(B)(ii) for catch-up contributions to SIMPLE IRA or 401(k) plans for individuals aged 50 or over remains unchanged at $3,000. - The compensation amount under §408(k)(2)(C) regarding eligibility for [simplified employee pensions (SEPs)](https://blog.acgworldwide.com/simplicity-of-a-sep-comes-with-a-price) remains unchanged at $600. - The deductible amount under §219(b)(5)(A) for Individual Retirement Account contributions remains unchanged at $6,000. ## **PBGC Premiums and Caps to Rise Again** For plan years beginning in 2020: - The per-participant flat premium rate is $83 for single-employer plans (up from a 2019 rate of $80). - The variable-rate premium for single-employer plans is $45 per $1,000 of unfunded vested benefits, up from a 2019 rate of $43. - The variable-rate premium is capped at $561 times the number of participants (up from a 2019 cap of $541). Plans sponsored by small employers (generally fewer than 25 employees) may be subject to a lower cap. After a series of sharp increases in recent years resulting from [law changes](https://blog.acgworldwide.com/pbgc-premiums-to-rise-again-the-reason-will-make-you-cry), the rates and cap will be indexed for wage growth in 2020 and beyond. ## **Social Security Checks Set to Go Up By 1.6%** Monthly [Social Security](https://blog.acgworldwide.com/deciding-when-to-start-collecting-social-security) and Supplemental Security Income benefits for nearly 69 million Americans will increase 1.6 percent in 2020, according to a Social Security Administration [press release](https://www.ssa.gov/news/press/releases/2019/#10-2019-1) from last month. The maximum amount of earnings subject to the Social Security tax (the “taxable wage base”) will increase to $137,700 from $132,900. — Posted on November 08, 2019 by [David J. Kupstas, FSA, EA, MSEA](https://blog.acgworldwide.com/author/david-j-kupstas-fsa-ea-msea) [David J. 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