By: Ryan Tikker

2022 has seen an increase in putative class actions brought under the Employee Retirement Income Security Act (ERISA) (29 U.S.C. §§ 1109 and 1132) against plan fiduciaries. Plaintiffs typically allege that plan fiduciaries breached the duties that ERISA imposes of employee retirement plans, namely, that the fiduciaries breached their duties of loyalty and prudence by including subpar investment options in employee 401(k) plans. These suits are seemingly driven by Monday-morning quarterbacking, where disillusioned plan participants with the benefit of hindsight contend that investment decisions were imprudent. In fact, since 2019, over 200 lawsuits challenging retirement plan fees have been filed against employers in every industry.1

A 401(k) fee case involving such a dispute, Matney v. Barrick Gold of N. Am., Inc., 2022 WL 1186532 (D.Ut. Apr. 21, 2022), and the corresponding appeal filed to the Tenth Circuit Court of Appeals, is garnering significant attention from the U.S. Chamber of Commerce and several other business groups. The Chamber of Commerce, the American Benefits Counsel, the ERISA Industry Committee, and the National Mining Association recently filed an amicus brief in November 2022 urging the Tenth Circuit Court of Appeals to affirm the district court’s decision to dismiss the ERISA lawsuit against Barrick Gold of North America, Inc.

The Matney Decision

The plaintiffs in Matney alleged that the plan fiduciaries violated ERISA when it failed to monitor, investigate, and ensure plan participants paid reasonable investment management fees and recordkeeping fees during a period of time. The plaintiffs alleged that each plan participant’s retirement assets covered expenses incurred by the plan, including individual investment fund management fees and recordkeeping fees, which were allegedly excessive, costing the proposed class millions of dollars in direct losses and lost investment opportunities. In support of their claims, the plaintiffs provided example of fees (measured as expense ratios) charged by a select group of funds in the plan, compared to fees charged by other funds in the marketplace. Id. at *5.

In April 2022, U.S. District Judge Tena Campbell dismissed the suit, finding that the plaintiff participants had failed to state a claim. Judge Campbell found that the plaintiffs made “apples to oranges” comparisons that did not plausibly infer a flawed monitoring decision making process.” Id. at *10. The court ultimately found that ERISA does not require plan fiduciaries to offer a particular mix of investment options, whether that be ones that favor institutional over retail share classes, ones that favor collective investment trusts (CITs) to mutual funds, or ones that choose passively-managed over actively-managed investments. Id.

As to the plaintiff participants’ concerns over allegedly improper recordkeeping fee arrangement with Fidelity, Judge Campbell dismissed this claim as well, finding that the court could not infer that the process was flawed, or that a prudent fiduciary in the same circumstances would have acted differently.

Finally, Judge Campbell found that in the context of the participants’ allegations of violations of ERISA’s duty of loyalty, they did not allege facts creating a reasonable inference that the plan fiduciaries were disloyal to the plan participants. On the contrary, Judge Campbell concluded that their allegations of disloyalty were conclusions of law or altogether conclusory and unsupported statements. Id. at *14.

The Matney Amicus

The Amicus Brief filed in support of the Defendants-Appellees noted that in many ERISA fee cases like the plaintiff participants in Matney, the complaint contains no allegations about the fiduciaries’ decision-making process, which is a key element in an ERISA fiduciary-breach claim Instead, complaints including the one in Matney typically contain allegations with the benefit of 20/20 hindsight that plan fiduciaries failed to select the cheapest or best-performing funds, or the cheapest recordkeeping option, often using inapt comparisons to further the point. Then, the plaintiffs ask the court to make a logical leap from the circumstantial allegations that the plan’s fiduciaries must have failed to prudently manage and monitor the plan’s investment line-up.

The Amicus Brief further averred that allowing suits to proceed like the 401(k) fee dispute case in Matney risks having the effect of severely harming employees’ retirement savings. Indeed, failing to dismiss meritless cases at the pleading stage would invite costly discovery and pressure plan sponsors into a narrow range of options available to participants, like passively-managed, low cost index funds.


We are closely watching the pending Matney appeal in front of the Tenth Circuit. Following the United States Supreme Court’s decision in Hughes v. Northwestern Univ., 142 S.Ct. 737 (2022), we have been monitoring how courts have interpreted this ruling and its impact on the 401(k) excessive fee space. The Hughes case requires a context-specific inquiry to assess the fiduciaries’ duties to monitor all plan investments and remove any imprudent ones and ultimately reaffirmed the need for courts to evaluate the plausibility pleading requirement established by Rule 8(a), Twombly, and Iqbal. It remains to be seen how other Circuit Courts interpret Hughes and how they will respond to this recent flurry of 401(k) fee cases.

1 See Jacklyn Willie, Suits Over 401(k) Fees Nab $150 Million in Accords Big and Small, Bloomberg Law (Aug. 23, 2022),

By: Ryan Tikker

Recently, the Ninth Circuit addressed and further clarified the requirement of a “full and fair review” in the context of a long-term disability benefit case under the Employee Retirement Income Security Act (ERISA). In matters that go to litigation, the Ninth Circuit held that a district court may not rely on rationales that the plan administrator did not raise as grounds for denying a claim for benefits. By failing to make arguments during the administrative process, but raising them for the first time at litigation, this can be found to be a violation of the “full and fair review” afforded by ERISA.

In Collier v. Lincoln Life Assurance Co. of Boston, 53 F.4th 1180 (9th Cir. 2022) the Ninth Circuit considered an appeal under the ERISA of a plan administrator Lincoln Life Assurance Company of Boston’s denial of her claim for long-term disability benefits. The participant Collier pursued an internal appeal after Lincoln denied her claim for LTD benefits. Lincoln again denied her claim. On de novo review, Judge James Selna of the Central District of California affirmed the administrator’s denial of her claim, finding that Collier was not credible and that she had failed to supply objective medical evidence to support her claim. The district court concluded that because a court must evaluate the persuasiveness of conflicting testimony and decide which is more likely true on de novo review, credibility determinations are inherently part of its review.

Apparently not so. The participant appealed, and the Ninth Circuit reversed, finding that the district court adopted new rationales that the plan administrator did not rely upon during the administrative process. The Ninth Circuit expressly held a district court clearly errors by adopting a newly presented rationale when applying de novo review.

The Ninth Circuit clarified that when a district court reviews de novo a plan administrator’s denial of benefits, it examines the administrative record without deference to the administrator’s conclusions to determine whether the administrator erred in denying benefits. It wrote that the district court’s task is to determine whether the plan administrator’s decision is supported by the record, not to engage in a new determination of whether the claimant is entitled to benefits. Id. at 1182.

The plaintiff Collier worked as an insurance sales agent when she experienced persistent pain in her neck, shoulders, upper extremities, and lower back, which she contended limited her ability to type and sit for long periods of time. She underwent surgery on her right shoulder and later returned to work, where she claimed that she continued to experience persistent pain. After applying for workers compensation, which recommended her employer institute ergonomic accommodations for Collier to allow her to work with less pain, Collier eventually stopped working, citing her reported pain as the cause.

After engaging in the administrative appeal process with Lincoln, she filed suit in the Central District of California. For the first time in its trial briefs, Lincoln argued that the participant was not credible. It further argued that her doctor’s conclusions were not supported by objective evidence, as they relied upon her subjective account of pain. Finally, Lincoln argued that her restriction could be accommodated with ergonomic equipment, such as voice-activated software. Id. at 1184.

As this was an ERISA action for LTD benefits, the administrative record was the only documentary evidence admitted by the district court. Judge Selna issued a findings of fact and conclusions of law affirming Lincoln’s denial of LTD benefits. Reviewing the decision de novo, Judge Selna concluded that Collier failed to demonstrate she was disabled under the terms of the plan. The court adopted Lincoln’s reasoning in determining she was not disabled, namely relying upon a finding that Collier’s pain complaints were not credible and that she failed to support her disability with objective medical evidence.

In reversing the decision by the district court, the Ninth Circuit wrote that a plan administrator “undermines ERISA and its implementing regulations when it presents a new rationale to the district court that was not presented to the claimant as a specific reason for denying benefits during the administrator process.” The Ninth noted it has “expressed disapproval of post hoc arguments advanced by a plan administrator for the first time in litigation.” Id. at 1186.

While the Ninth Circuit has held that a plan administrator may not hold in reserve a new rationale to present in litigation, it has not clarified whether the district court clearly errs by adopting a newly presented rationale when applying de novo review. It explicitly does so now, finding that a “district court cannot adopt post-hoc rationalizations that were not presented to the claimant, including credibility-based rationalizations, during the administrative process.” Id. at 1188.

The Collier ruling places strict mandates on plan administrators to specifically and expansively delineate the bases for denials at the administrative stage. Simply stating that a claimant does not meet a policy definition, such as the disability standard under the applicable plan, is now not enough.

Seyfarth Synopsis: The billions of taxpayer dollars now flowing out to financially troubled multiemployer plans is good news for those plans, their contributing employers, and plan participants. That said, it is not a “get out of jail free” card for employers considering withdrawing from such plans. Employer beware.

Christmas came early this past year for some financially troubled multiemployer pension plans, thanks to newly available Special Financial Assistance (SFA) under the American Rescue Plan Act. President Biden recently announced, for example, that the Central States, Southeast and Southwest Areas Pension Fund would receive $35 billion in SFA. Similarly, the New York State Teamsters Pension Fund in November learned it would receive $963.4 million in SFA.

As of December 30, 2022, PBGC has approved over $45.6 billion in SFA to plans that cover over 550,000 workers, retirees, and beneficiaries. By the time the application process for SFA is over, the PBGC estimates that more than 200 plans covering more than 3 million participants and beneficiaries will receive some $94 billion in SFA.

This windfall may cause contributing employers participating in these plans to wonder how this effects them. There is a lot for contributing employers to be grateful for:

  1. Multiemployer plans receiving SFA, if all goes as planned, should receive sufficient funds to cover all participant benefits due through 2051. Even if the SFA amounts received are insufficient to cover benefits payable through the next 28 years, one would hope the financial relief received would cover benefits at least through the vast majority of that time;
  2. Multiemployer plans receiving SFA are limited both in how they invest SFA money and in increasing benefits, so as to reduce the chances these multiemployer plans run out of money too soon;
  3. Participating employees and retirees should actually receive their full pension benefits for the foreseeable future. Employers need not fear that the benefits they are paying for are illusory;
  4. These multiemployer plans will not become insolvent like they would have without SFA, and that reduces the risks of mass withdrawal; and
  5. The SFA program was paid for entirely by taxpayer dollars.

    What SFA does not do, however, is make it any less expensive to exit these funds — at least initially. While the Central States Pension Fund, for example, may have just gone from being 17% funded to roughly 78% funded, that is not going to equate to a similar immediate reduction in employer withdrawal liability. This is due to two new PBGC withdrawal liability rules for funds receiving SFA:

    1. The discount rate to determine unfunded vested benefits for withdrawal liability must be the PBGC’s very conservative mass withdrawal interest assumptions that approximate the market price that insurance companies charge to assume a similar pension-benefit-like liability for withdrawals. For many multiemployer pension plans, this is a lower discount rate than they would otherwise use for funding purposes, and will result in a higher calculated amount of unfunded vested benefit liability. This rule remains in effect until the later of ten years or when the plan projects it will exhaust any SFA assets (assuming plan benefits and expenses are paid exclusively from SFA assets until exhausted).
    2. Multiemployer plans, at least those receiving SFA under the PBGC final rule as opposed to the old interim rule, will not initially credit all of the SFA assets for withdrawal liability purposes. Instead, the SFA will be phased in, with the phase-in period beginning the first plan year in which the plan receives SFA, and extending through the end of the plan year in which the plan expects SFA funds to be exhausted (assuming plan benefits and expenses are paid exclusively from SFA assets until exhausted). Depending upon the multiemployer plan, it could be several years or even well over a decade before most or all of the SFA assets are counted for withdrawal liability purposes. This will mean employers withdrawing shortly after plans receive SFA will see little benefit to the SFA reflected in their assessments.

    Every multiemployer plan’s situation is different, but most contributing employers should not assume a withdrawal — especially if their share of unfunded vested benefit liability is so high their payment schedule is capped at 20 years — will immediately be less expensive post SFA. At a minimum, they should consult with counsel and actuaries to determine what the SFA means, and does not mean, for them.

    While contributing employers may not benefit from multiemployer plans receiving SFA in the form of immediately reduced withdrawal liability, both contributing employers and employees will certainly still benefit from participating in plans that will now how have sufficient assets to pay full benefits for decades to come. That is something everyone can be thankful for.

    Seyfarth Synopsis: Plans have been scrambling to gather data and work with providers in preparation for the December 27, 2022 deadline to report prescription drug and health care spending information. Just in time for the holidays, the Departments of Labor, Health and Human Services, and Treasury (the “Departments”) have issued FAQs related to Prescription Drug and Health Care Spending Reporting under Title II (the “Transparency Requirements”) of the Consolidated Appropriations Act of 2021 (CAA). The FAQs grant extensions to various reporting and compliance deadlines and good faith relief relating to the Transparency Requirements.

    The Transparency Requirements require group health plans to report to the Departments certain information related to prescription drug and other health care spending. For example, group health plans must report to the Departments the 50 most frequently dispensed brand prescription drugs; the 50 most costly prescription drugs by total annual spending; the 50 prescription drugs with the greatest increase in plan expenditures over the preceding plan year; and the impact on premiums of rebates, fees, and any other remuneration paid by drug manufacturers to the plan or coverage or its administrators or service providers .

    Some Transparency Requirements under the CAA applicable to group health plans overlap with the “transparency in coverage” cost-sharing disclosures under the Affordable Care Act. In November of 2020, the Departments issued Final Transparency in Coverage Rules (TiC Rules) which require group health plans and health insurance issuers to disclose cost-sharing information to participants, beneficiaries, and, in some cases, the public. Additionally, Title I of the CAA (No Surprises Act) which protects plan participants from surprise medical bills for services provided by out-of-network or nonparticipating providers and facilities, contains extensive provisions regarding reporting and disclosure of charges and benefits. For more information regarding the TiC Rules and No Surprises Act, see our prior posts here and here.

    In August 2021, the Departments issued FAQs related to the TiC Rules, No Surprises Act, and Transparency Requirements which extended various compliance deadlines. The Departments announced that they would not bring enforcement actions against group health plans that complied with the Transparency Requirements for the 2020 and 2021 reference years by December 27, 2022. For more information regarding previous FAQ guidance from the Departments which extended compliance deadlines, see our prior post here.

    On December 23, 2022, just four days before the reporting deadline for the 2020 and 2021 reference years, the Departments issued FAQs related to Prescription Drug and Health Care Spending Reporting. The key takeaways from the FAQs are:

    • Nonenforcement Policy. The Departments will not take enforcement action with respect to any plan that uses a good faith, reasonable interpretation of the regulations and the Prescription Drug and Health Care Sending Reporting instructions in making its submission for the 2020 and 2021 years by December 27, 2022.
    • Good Faith Relief and Grace Period. There will be a submission grace period through January 31, 2023 in which a plan will not be considered out of compliance if a good faith submission of 2020 and 2021 data is made on or before January 31, 2023.
    • Flexibilities for 2020 and 2021 Data. The following clarifications and flexibilities apply for the 2020 and 2021 reference years:
      • Multiple submissions are permitted for the same reporting entity;
      • Multiple reporting entities can submit the same data file type on behalf of the same plan;
      • If there are multiple reporting entities, aggregation may be conducted at a less granular level than that used by the reporting entity that is submitting the total annual spending data;
      • Group health plans or their reporting entity that submit only the plan list, premium and life-years data, and narrative response may make a submission by email;
      • Vaccine reporting is optional; and
      • Reporting entities do not need to report a value for “Amounts not applied to the deductible or out-of-pocket maximum” and the “Rx Amounts not applied to the deductible or out-of- pocket maximum.”

    These compliance deadline extensions, clarifications, and flexibilities are welcome relief for group health plans that are required to complete Prescription Drug and Health Care Spending Reporting under the Transparency Requirements. For assistance with these reporting obligations, please reach out to the employee benefits attorney at Seyfarth Shaw LLP with whom you usually work. To stay up to date with future guidance related to the TiC Rules, No Surprises Act, and Transparency Requirements, be on the lookout for additional Seyfarth Legal Updates.

    Seyfarth Synopsis: Recently the U.S. Treasury Department (Treasury) and Internal Revenue Service (IRS) issued regulations (the “Final Regulations”) which finalized previously proposed relief for furnishing Forms 1095-B and 1095-C to individuals. Notably, the Final Regulations provide a permanent 30-day extension to the due date for furnishing Form 1095-C to individuals. This extension was previously granted in the 2021 final instructions for completing Forms 1094-C and 1095-C for 2021 (see our blog here) issued in December 2021.

    Continue Reading Permanent Extension to the ACA Reporting Deadline

    ‘Missing’ or lost participants often raise a handful of legal and administrative issues for plan sponsors. The lack of definitive guidance has led to confusion for plan sponsors in deciding what to do about missing participants. While the IRS and DOL have their own separate concerns, both agencies are concerned and likely to inquire about a plan’s missing participants upon audit. What steps should plan sponsors take to decrease the chance that a participant will go missing, and what does the IRS and DOL expect you to do to find missing participants? Grab your cup of coffee and tune in to hear Richard and Sarah chat with their first external guest, Gary Chase of Willis Towers Watson, about these pressing questions that frankly, every retirement plan struggles with.

    Click here to listen to the full episode.

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    Seyfarth Synopsis: The IRS has announced an increase to the applicable dollar amount for determining the Patient-Centered Outcomes Research Institute (“PCORI”) Fee for 2023 as well as other health and welfare limits.

    The Affordable Care Act (ACA) established the PCORI to support research on clinical effectiveness. The PCORI is funded in part by fees paid by certain health insurers and sponsors of self-insured health plans (referred to as “PCORI fees”). The PCORI fee is determined by multiplying the average number of covered lives for the plan year times the applicable dollar amount, and is paid annually to the IRS using Form 720. The applicable dollar amount as set by the IRS for plan years ending on or after October 1, 2021 and before October 1, 2022 was $2.79 per enrollee.

    The IRS has issued Notice 2022-59 announcing that the applicable dollar amount that must be used to calculate the fee for plan years that end on or after October 1, 2022 and before October 1, 2023. The 2023 PCORI fee is $3.00 per enrollee, an increase of $0.21 per enrollee from 2022. The $3.00 PCORI fee is due July 31, 2023 for 2022 calendar year plans.

    For more information on paying the PCORI fee, see our prior posts here and here, and the IRS website here.

    Additionally, the IRS previously announced other 2023 cost-of-living adjustments for employer-sponsored health and welfare plans. The changes in the 2023 cost-of-living adjustments for employer-sponsored health and welfare plans are summarized in the table below:

    Health and Welfare Program Limits
    (Rev. Proc. 2022-24 & Rev. Proc. 2022-38)
    Qualified Transportation Fringe Benefit and Qualified Parking (Monthly Limit)$280$300+$20
    Health Flexible Spending Account (Health FSA) Maximum Salary Reduction Limit$2,850$3,050+$200
    Health FSA Carryover Limit$570$610+$40
    Maximum Amount Excluded from Employee’s Gross Income for the Adoption of a Child with Special Needs Through an Adoption Assistance Program (AAP)$14,890$15,950+$1,060
    Maximum Amount Excluded from an Employee’s Gross Income for Amounts Paid by an Employer for Qualified Adoption Expenses Through an AAP*$14,890$15,950+$1,060
    Health Savings Account (HSA) Annual Contribution Limit
    • Self-only Coverage
    • Family Coverage



    HSA Catch-up Contribution Limit**$1,000$1,000No change
    Dependent Care Flexible Spending Account (Dependent Care FSA)*** Annual Contribution Limit for Employee’s Who Are Married and Filing a Joint Return or if the Employee Is a Single Parent$5,000$5,000No change
    Dependent Care FSA Annual Contribution Limit if Employee Is Married But Filing Separately$2,500$2,500No change
    High Deductible Health Plan (HDHP) Minimum Annual Deductible
    • Self-only Coverage
    • Family Coverage



    HDHP Maximum Annual Out-of-pocket Limit (Deductibles, Co-payments and Other Amounts, but not Premiums)
    • Self-only Coverage
    • Family Coverage



    Maximum Amount that May Be Made Newly Available for an Excepted-Benefit Health Reimbursement Arrangements (EBHRA)$1,800$1,950+$150

    * The amount excludable from an employee’s gross income for amounts paid by an employer for qualified adoption expenses through an AAP begins to phase out in 2023 for taxpayers with modified adjusted gross income in excess of $239,230 and is completely phased out in 2023 for taxpayers with modified adjusted gross income of $279,230 or more.

    ** The HSA Catch-up Contribution limit is set by statute.

    ***Dependent FSA limits are set by statute and do not adjust for inflation, but the Dependent FSA limits were temporarily increased for 2021 only by the American Rescue Plan Act of 2021 due to the COVID-19 pandemic.

    Please contact the employee benefits attorney at Seyfarth Shaw LLP with whom you usually work if you have any questions regarding the PCORI fee or the 2023 limits on health and welfare plans.

    Seyfarth Synopsis: IRS quietly extends relief for the “family glitch” to calendar year cafeteria plans in unannounced revisions to Notice 2022-41.

    In our October Legal Update (available here), we described the publication of final IRS rules fixing the so-called “family glitch” in the availability of a premium tax credit for Health Insurance Exchange (Exchange) coverage. We also described the companion IRS Notice 2022-41, which allows cafeteria plans to permit participants to drop medical coverage for those covered family members who enrolled in a Qualified Health Plan (QHP) on the Exchange (either during an annual enrollment period or during a special enrollment period for Exchange coverage) on or after January 1, 2023.

    At the time of publication of that Legal Update, the additional flexibility permitted by Notice 2022-41, by its plain terms, was available only to non-calendar year cafeteria plans. However, as we noted in the Update:

    [In] multiple informal communications with the IRS, it appears that the IRS intended to extend the flexibility provided in Notice 2022-41 to calendar year plans. However, in light of the clear language in the “Guidance” section of the notice, we currently are unable to provide assurance that this election change opportunity may be adopted for a calendar year plan. Thus, published clarification from the IRS on this point would be welcomed.

    In revisiting Notice 2022-41 (on November 9), it appears that the limitation on the applicability of this Guidance to only “non-calendar year” cafeteria plans has been removed, so that this additional permitted election change event may now be adopted for any cafeteria plan, even calendar year cafeteria plans. This is a welcome (albeit a quiet) expansion of the guidance!

    If you would like to discuss adopting this new election change flexibility for your cafeteria plan, please contact one of our Employee Benefit attorneys directly. As noted in our Legal Update, there is additional time to formally amend your cafeteria plan, but if this optional new election change opportunity is adopted, participants should be informed of the change and the cafeteria plan should be in operational compliance as of the amendment’s effective date.

    In December 2019, The Setting Every Community Up for Retirement Enhancement Act (SECURE Act) was enacted and signed into law. The Act was the most significant piece of legislation impacting employee benefit plans since the Pension Protection Act in 2006, and includes a plethora of changes to the laws governing employer-sponsored retirement plans, specifically impacting defined contribution and defined benefit plans, IRAs, 529 plans and governmental plans. And then the pandemic hit. So while the SECURE Act has been in place for over two years, many employers are still grappling with what adjustments they need to make. How has the SECURE Act impacted post-death required minimum distributions? How has it impacted long-term part-time employees and their participation in defined contribution plans? Grab your cup of coffee and tune in to hear Richard and Sarah chat with Seyfarth’s Irine Sorser about these pressing questions and more!

    Click here to listen to the full episode.

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    Seyfarth Synopsis: The IRS just announced the 2023 annual limits that will apply to tax-qualified retirement plans. For a second year in a row, the IRS increased the annual limits, allowing participants to save even more in 2023. Employers maintaining tax-qualified retirement plans will need to make sure their plans’ administrative procedures are adjusted accordingly.

    In Notice 2022-55, the IRS announced the various limits that apply to tax-qualified retirement plans in 2023. The “regular” contribution limit for employees who participate in 401(k), 403(b) and most 457 plans will increase from $20,500 to $22,500 in 2023. The “catch-up” contribution limit for individuals who are or will be age 50 by the end of 2023 will increase from $6,500 to $7,500 in 2023. Therefore, if participants are or will be age 50 by the end of 2023, participants may be eligible to contribute up to $30,000 to their 401(k) or 403(b) plan in 2023.

    The maximum amount that may be contributed to a defined contribution plan will increase from $61,000 to $66,000 in 2023. Additionally, the maximum annual compensation that may be taken into account under a plan will increase from $305,000 to $330,000 for 2023. For individuals investing in individual retirement accounts (IRAs), the annual contribution limit will increase from $6,000 to $6,500 for 2023 (for those who are catch-up eligible, this limit will increase from $7,000 to $7,500 for 2023).

    The Notice also includes several other notable retirement-related limitation changes for 2023, including the dollar limitation on the annual benefit under a defined benefit plan, which increases from $245,000 to $265,000; the dollar limit used to determine a highly compensated employee, which increases from $135,000 to $150,000; and the dollar limit used when defining a key employee in a top-heavy plan, which increases from $200,000 to $215,000.

    Individuals should check their plan contribution elections and consult with their personal tax advisor before the end of 2022 to make sure that they take full advantage of the contribution limits in 2023. Given the numerous changes, employers who sponsor a tax-qualified retirement plan should consider any necessary adjustments to plan administrative procedures and update their participant notices to ensure proper administration of the plan in 2023.

    Employers who sponsor defined benefit pension plans (e.g., cash balance plans) should review the new limits in the IRS Notice and make any necessary adjustments to plan administrative/operational procedures.