This month, the IRS issued Notice 2024-80, which provides the 2025 cost-of-living adjustments on the dollar limitations for pensions and other benefits like LOSAPs.
The limit on the benefit that can be provided in a LOSAP remained at $7,500 for the 2025 tax year. The historical limitations are as follows:
| Year | Limit |
| up to 2017 | $3,000 |
| 2018 | $6,000 |
| 2019 | $6,000 |
| 2020 | $6,000 |
| 2021 | $6,000 |
| 2022 | $6,500 |
| 2023 | $7,000 |
| 2024 | $7,500 |
| 2025 | $7,500 |
Since this blog is mainly focused on New York State LOSAPs, it is important to note that the New York State law has limitations that would not allow a sponsor to provide an annual benefit of $7,500. The maximum benefit that can be provided in a defined contribution plan is $1,200. For defined benefit plans, the $7,500 IRS limit applies to the actuarial value of the benefit earned during the year. The largest benefit that can be awarded in a defined benefit plan would be a $30 monthly benefit payable at age 55. This benefit would have a maximum actuarial value of around $6,000 using reasonable actuarial assumptions.
You can read the news release from the IRS here: https://www.irs.gov/newsroom/401k-limit-increases-to-23500-for-2025-ira-limit-remains-7000.
The direct link to Notice 2024-80 is here: https://www.irs.gov/pub/irs-drop/n-24-80.pdf
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