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IRS Announces Cost Of Living Dollar Limitation Adjustments

By November 16, 2011February 19th, 2015No Comments

iStock_000015232440XSmallOn October 20, 2011, the Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for Tax Year 2012. In general, many of the pension plan limitations will change for 2012 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. However, other limitations will remain unchanged.

• The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $16,500 to $17,000.
• The catch-up contribution limit for those aged 50 and over remains unchanged at $5,500.

Below are the plan limits for 2012 –

Plan Limits for Plan Year 2012 2011
401(k), 403(b), 457 Elective Deferral Limit $17,000 $16,500
Catch-Up Contribution Limit $5,500 $5,500
Annual Compensation Limit $250,000 $245,000
Defined Contribution Limit >$50,000 $49,000
Defined Benefit Limit $200,000 $195,000
Key Employee $165,000 $160,000
Definition of Highly Compensated Employee $115,000 $110,000
Social Security Wage Base $110,100 $106,800


This information is provided by our business partner, Peter A. Klinkmueller, AIF® of Commonwealth Financial Network For more information, please contact Ken Bettenhauser at HR Knowledge at or 508-339-1300

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