This month, the IRS issued Notice 2025-67, which provides the 2026 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 increased from $7,500 for 2025 to $8,000 for the 2026 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 |
| 2026 | $8,000 |
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 $8,000. The maximum benefit that can be provided in a defined contribution plan is $1,200. For defined benefit plans, the $8,000 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-24500-for-2026-ira-limit-increases-to-7500
The direct link to Notice 2025-67 is here: https://www.irs.gov/pub/irs-drop/n-25-67.pdf