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Employee benefits: Retirement plan limitations for 2009

The Internal Revenue Service announced the cost-of-living adjustments applicable to the dollar limitations for retirement plans for the 2009 tax year.

Type of Limitation

2008

2009

Maximum 401(k) Salary Deferral (Pretax) Limits

$15,500

$16,500

SIMPLE Plan Deferral

$10,500

$11,500

Elective deferrals under 457(b) plans of state and local governments and tax-exempt employers.

$15,500

$16,500

Catch-up Contributions for Individuals aged 50 and over

$5,000

$5,500

Section 415 Annual Benefit Limits

Defined Contributions Plans

$46,000

$49,000

Defined Benefit Plans

$185,000

$195,000

Annual Compensation Limit

$230,000

$245,000

Highly Compensated Employee Threshold

$105,000

$110,000

Dollar limit concerning the definition of key employee in a top-heavy plan

$150,000

$160,000

Compensation amount for participation in a SEP

$500

$550

ESOP Threshold for Exemption to 5-year Distribution Requirement

$935,000

$985,000

Amount for lengthening of 5-year ESOP Distribution Period

$185,000

$195,000

OASDI Contribution And Benefit Base

The Social Security Administration also released the following information regarding the 2009 contribution and benefit base for the Old-Age, Survivors and Disability Insurance (OASDI) program and Medicare’s Hospital Insurance (HI) program:

Maximum Earnings Taxable

2008

2009

Social Security Wage Base (OASDI only)

$102,000

$106,800

Medicare Wage Base (HI only)

No Limit

No Limit

  • Partner

    Mary is partner with a focus on employee benefits. Her practice includes design and compliance of qualified retirement plans and employee welfare benefit plans, including COBRA, and nonqualified deferred compensation ...

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