On October 20, 2011, the IRS announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for the Tax Year 2012. According to the announcement, many of the pension plan limitations will change for the first time since 2009 because the increase in the cost-of-living index has met the statutory thresholds that trigger their adjustment.
Below are the 2012 plan limitations:
2012 Retirement Plan Limits
|
2009-
2011 |
2012 |
401(k), 403(b) and 457(b) Deferral Limits |
$16,500 |
$17,000 |
401(k) and 403(b) Catch-up Deferral Limits |
$5,500 |
$5,500 |
Annual Limitation on Compensation |
$245,000 |
$250,000 |
Defined Contribution Limitation |
$49,000 |
$50,000 |
Defined Benefit Limitation |
$195,000 |
$200,000 |
Highly Compensated Employee Compensation Threshold |
$110,000 |
$115,000 |
Key Employee Compensation – Officer Threshold |
$160,000 |
$165,000 |
SIMPLE Deduction |
$11,500 |
$11,500 |
SIMPLE Catch-up Contribution |
$2,500 |
$2,500 |
IRA Contribution Limit |
$5,000 |
$5,000 |
IRA Catch-up Contribution Limit |
$1,000 |
$1,000 |
Social Security Wage Base |
$106,800 |
$110,100 |
For more information, please contact:
Dale R. Vlasek
216.348.5452
dvlasek@mcdonaldhopkins.com
or any of our Employee Benefits attorneys by clicking on the link below:
Employee Benefits
Benefit programs should be a win-win for employers and employees. We strive to accomplish that goal in the design, implementation and operation of sophisticated benefit and executive compensation programs – qualified and non-qualified retirement programs and health and welfare plans. Our employee benefits team has a long track record of working to maximize the efficiency and economic feasibility of each program.
Carl J. Grassi, President
600 Superior Avenue, East, Suite 2100, Cleveland, Ohio 44114
Chicago
312.280.0111
Fax: 312.280.8232
|
Cleveland
216.348.5400
Fax: 216.348.5474
|
Columbus
614.458.0025
Fax: 614.458.0028
|
Detroit
248.646.5070
Fax: 248.646.5075
|
Miami
1.305.704.3990
Fax: 1.305.704.3999
|
West Palm Beach
561.472.2121
Fax: 561.472.2122
|
IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with requirements imposed by the Internal Revenue Service, we inform you that any tax advice contained in this communication (including any attachments), was not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding any penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any transaction matter addressed herein.
© 2011 McDonald Hopkins LLC All Rights Reserved. This Alert is designed to provide current information for our clients, friends and their advisors regarding important legal developments. The foregoing discussion is general information rather than specific legal advice. Because it is necessary to apply legal principles to specific facts, always consult your legal advisor before using this discussion as a basis for a specific action.
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