2020 Limitations Adjusted as Provided in Section 415(d), etc.

Notice 2019-59

Section 415 of the Internal Revenue Code (the Code) provides for dollar limitations on benefits and contributions under qualified retirement plans. Section 415(d) requires that the Secretary of the Treasury annually adjust these limits for cost-of-living increases. Other limitations applicable to deferred compensation plans are also affected by these adjustments under § 415. Under § 415(d), the adjustments are to be made under adjustment procedures similar to those used to adjust benefit amounts under § 215(i)(2)(A) of the Social Security Act.

Cost-of-Living Adjusted Limits for 2020

Effective Jan. 1, 2020, the limitation on the annual benefit under a defined benefit plan under § 415(b)(1)(A) is increased from $225,000 to $230,000.

For a participant who separated from service before Jan. 1, 2020, the participant's limitation under a defined benefit plan under § 415(b)(1)(B) is computed by multiplying the participant’s compensation limitation, as adjusted through 2019, by 1.0176.

The limitation for defined contribution plans under § 415(c)(1)(A) is increased in 2020 from $56,000 to $57,000.

The Code provides that various other dollar amounts are to be adjusted at the same time and in the same manner as the dollar limitation of § 415(b)(1)(A). After taking into account the applicable rounding rules, the amounts for 2020 are as follows:

The Code provides that the $1 billion threshold used to determine whether a multiemployer plan is a systemically important plan under § 432(e)(9)(H)(v)(III)(aa) is adjusted using the cost-of-living adjustment provided under § 432(e)(9)(H)(v)(III)(bb). After taking the applicable rounding rule into account, the threshold used to determine whether a multiemployer plan is a systemically important plan under § 432(e)(9)(H)(v)(III)(aa) is increased from $1,097,000,000 to $1,135,000,000.

The Code also provides that several retirement-related amounts are to be adjusted using the cost-of-living adjustment under § 1(f)(3). After taking the applicable rounding rules into account, the amounts for 2020 are as follows:

Drafting Information

The principal author of this notice is Tom Morgan of the Office of the Associate Chief Counsel (Employee Benefits, Exempt Organizations and Employment Taxes). However, other personnel from the IRS participated in the development of this guidance. For further information regarding this notice, contact Morgan at 202-317-6700 or John Heil at 443-853-5519 (not toll-free calls).


(1) Notice 2017-64, 2017-45 I.R.B. 486, raised this limit from $125,000 to $130,000 although § 1.401(a)(9)-6, A-17(d)(2) provides for increases of the $125,000 limitation only in multiples of $10,000. Notice 2018-83, 2018-47 I.R.B. 774, indicated that this limit would remain at $130,000 until it would be adjusted to $135,000 pursuant to § 1.401(a)(9)-6, A-17(d)(2), and would be adjusted only in increments of$10,000 after that adjustment. Accordingly, future adjustments to this limit (which has been raised to $135,000 for 2020) will be made in increments of $10,000.