Effective: January 1, 2026

The IRS has released the 2026 cost-of-living adjustments applicable to the dollar limitations on benefits and contributions of retirement plans and health and welfare benefit plans. We recommend plan sponsors update their systems and formulas to include the limits that have been adjusted.

We note that the IRS guidance increases the amount of compensation used to determine which high earner employees will be required to make catch-up contributions as Roth contributions during 2026. Specifically, this amount increased from $145,000 to $150,000 during 2025. This means employees who have more than $150,000 of FICA wages during 2025 will be required to make catch-up contributions as Roth during 2026.  Plan sponsors who were preparing for this 2026 change and using the previous $145,000 should make sure their payroll systems are updated to reflect this change.

For a printable version of this chart, click here.

For more information on these cost-of-living adjustments, contact your SGR Executive Compensation and Employee Benefits counsel.