On 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|
|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 email@example.com or 508-339-1300Button Text.