Year-End Plan Adjustments Not Delayed by Late Contribution Limits

The longest government shutdown on record is now over, and, soon after, the IRS released its annual contribution limits.

Though publicized later than usual, the reports are standard and usually easy to predict, so recordkeepers and payroll providers say that the delay will not have much effect.

The November 13 release was later than previous years. The limits for 2025 and 2024 tax years were announced on November 1 of the preceding year, while the limits for the 2023 tax year were announced in October 2022,

“From a payroll perspective, the 2026 IRS limits aren’t particularly surprising,” wrote Zach Keep, manager of compliance risk at Paychex, to PLANADVISER in a statement. “These adjustments follow a standard, formula-driven process each year, so most providers have well-established workflows to incorporate them quickly. Even with the slight delay, it’s not likely to disrupt system setups for next year. This is one of the more routine aspects of 401(k) administration.”

Similarly, Chris Magno, senior vice president of retirement services at ADP, told PLANADVISER that though the announcement of the contribution limits is slightly later than usual, it was not late by much.

“We have year-end processes to handle these changes, and since it happens generally every year, they are streamlined,” he said. “No surprises, no issues—we will have systems updated for the change.”

At the recordkeeping level, the late release also was not surprising or tardy enough to create any headaches.

“We can accommodate new limits instantly, so the impact is minimal to none with our technology,” Jared Porter, chief operating officer of 401Go, told PLANADVISER. “401Go was built to handle just these types of regulatory changes without disruption to employers or participants.”

The recent changes will increase the contribution limits for workers participating in 401(k), 403(b) and most 457 plans, as well as the federal government’s Thrift Savings Plan, raising the limit to $24,500, up from $23,500. Additionally, the annual contribution limit to individual retirement accounts will rise to $7,500, an increase from $7,000.

The increase in contribution limits benefits retirement savers, Porter said, adding that more needs to be done to increase retirement savings.

“Higher limits don’t solve the underlying challenge of engagement,” he said. “We can see that there are many employees not taking full advantage of their plans, especially in small businesses, and there is still a lot of work for small businesses to actually add the retirement benefit.”