On November 12, President Trump signed Pub. L. 119-37, which reopened the federal government. This ended the longest shutdown in U.S. history. The new law funds the government through January 30, 2026. Some federal agencies that had been operating with limited resources are now in the process of reopening. The announcement of the pension cost-of-living adjustments (COLAs) came shortly after the government reopened.

Pension COLAs

The IRS announced the changes to the dollar limits on benefits and contributions under qualified retirement plans, as well as other items, for tax year 2026 [Notice 2025-67, 11-13-25].

IRC §415, which provides for dollar limits on benefits and contributions under qualified retirement plans, requires that the IRS annually adjust these limits for cost-of-living changes. The IRC also requires various other amounts to be adjusted at the same time and in the same manner as these dollar limits.

The limitation on the exclusion for elective deferrals under §402(g)(1) (e.g., §401(k) and §403(b) plans) increases to $24,500 (from $23,500).

Courtesy of PayrollOrg – Rayna Alexander, Esq.