Mercer projects 2021 retirement plan limits
![Connecticut Enacts Paid Family and Medical Leave](/insights/law-and-policy/mercer-projects-2021-retirement-plan-limits/_jcr_content/root/insight-wrapper/lead/lead-media/image.coreimg.85.1440.jpeg/1678555439920/gettyimages-1147331105-1200x630.jpeg)
Most key Internal Revenue Code (IRC) limits for qualified retirement plans won’t increase in 2021, Mercer projects. The 415(c) maximum annual addition and the 401(a)(17) limit on retirement plan compensation will likely rise to the next rounding increment, but these limits are so close to the rounding breakpoint that even minimal deflation may keep the amounts at the 2020 levels.
These estimates are determined using the tax code’s cost-of-living adjustment and rounding methods, the Consumer Price Index for All Urban Consumers (CPI-U) through June, and estimated CPI-U values for July–September. Qualified plan limits are based on the year-to-year increase in the third-quarter CPI-U, so figures can’t be finalized until after September CPI-U values are published in October. IRS is expected to announce the official 2021 limits in late October or early November.
-
Law & PolicyHealth, wealth and global news, views and analysis, written by Mercer legislative, regulatory and policy pros with practical insights for employers and benefit…
Related insights
-
Law & Policy
SECURE 2.0’s auto-enrollment mandate revs up with IRS proposal
IRS proposed regulations provide comprehensive guidance on mandatory automatic enrollment for new 401(k) and 403(b) plans. Comments are due March 17. -
Law & Policy
Global Legislative Update, February 2025
The Global Legislative Update for February provides insights about key legal developments around the globe affecting benefit and human resource programs. -
Law & Policy
IRS updates determination and opinion letter procedures for 2025
IRS’s annual update to procedures for requesting determination letters and private letter rulings contains several changes to the procedures for preapproved plans,…