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IRS Sets 2024 Contribution Limits
The Internal Revenue Service announced that the dollar amounts participants may contribute to tax-deferred savings plans will increase for tax year 2024, which begins January 1.
| 457 Deferred Compensation Plan Contribution Limits* | 2024 |
|---|---|
| Annual deferral limit for participants younger than age 50 | $23,000 |
| Standard Catch-Up (not to exceed participant’s catch-up credit) | $23,000 ($46,000 total) |
| Age 50+ Catch-Up Limit | $7,500 ($30,500 total) |
* The annual limit includes any voluntary contributions that Hybrid Retirement Plan members make to the Hybrid 457 Deferred Compensation Plan and other supplemental 457 plans. Any Roth after-tax or pre-tax contributions made to the Commonwealth of Virginia 457 Deferred Compensation Plan also count toward the limit.
Changing Contributions
To increase Commonwealth of Virginia 457 Plan contributions effective the first pay period of 2024, participants should log in to their online account by 4 p.m., December 29.
Participants cannot use the Age 50+ Catch-Up and the Standard Catch-Up in the same calendar year. For more information on the Age 50+ Catch-Up, Standard Catch-Up, military leave make-up, one-time deferrals or investment options, refer participants to the Contributions section of the Commonwealth of Virginia 457 Deferred Compensation Plan website.
The annual limit applies to:
- Voluntary contributions that Hybrid Retirement Plan members make to the Hybrid 457 Deferred Compensation Plan.
- Contributions made to other supplemental 457 plans.
- Roth after-tax or pre-tax contributions made to the Commonwealth of Virginia 457 Deferred Compensation Plan.
Employers need to monitor members’ contributions and stop all 457 contributions and the employer match once they reach the limit. A contribution limit report is accessible in EZLink. If you identify a member who has exceeded the limit, email dcplans@varetire.org.
IRS Increases 2024 Annual Compensation Limits for Creditable Compensation
- Employees with membership dates before April 9, 1996: $505,000.
- Employees with membership dates on or after April 9, 1996: $345,000.
Income over the amounts provided is not part of an employee’s creditable compensation in VRS retirement plans. If an employee’s annual salary exceeds the IRC § 401(a)(17) compensation limit, myVRS Navigator automatically calculates creditable compensation and contributions using the limit. Employers should report the employee’s actual salary. Do not withhold the member contribution on the excess salary from the employee. Instead, pay it to the employee as wages. Other VRS benefits, such as life insurance, are based on the full, uncapped annual salary.
NOTE
Although the IRS announces compensation limits as effective for January 1, VRS applies the limit on a plan-year basis (July 1 to June 30).
