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Retirement Plan Limitations for 2012

The Internal Revenue Service announced the cost-of-living adjustments applicable to the dollar limitations for retirement plans for the 2012 tax year. Many (but not all) of the limitations have changed for 2012 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment.

Type of Limitation

2011

2012

Maximum 401(k) and 403(b) elective deferrals

$16,500

$17,000

SIMPLE plan deferrals

$11,500

$11,500

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

$16,500

$17,000

Catch-up contributions for individuals aged 50 and over

$5,500

$5,500

Section 415 annual benefit limits:

   

Defined contributions plans

$49,000

$50,000

Defined benefit plans

$195,000

$200,000

Annual compensation limit

$245,000

$250,000

Highly compensated employee threshold

$110,000

$115,000

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

$160,000

$165,000

Compensation amount for participation in a SEP

$550

$550

ESOP threshold for exemption to 5-year distribution requirement

$985,000

$1,015,000

Amount for lengthening of 5-year ESOP distribution period

$195,000

$200,000

Contribution and Benefit Base

The Social Security Administration also released the following information regarding the 2012 contribution and benefit base for the Old-Age, Survivors and Disability Insurance (OASDI) program and Medicare’s Hospital Insurance (HI) program:

Maximum Earnings Taxable

2011

2012

Social Security Wage Base (OASDI only)

$106,800

$110,100

Medicare Wage Base

No Limit

No Limit



If you have any questions regarding this information, please contact a member of Bingham Greenebaum Doll LLP’s Employee Benefits Team.

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