Employee Benefits-IRS Announces The Pension Plan Limits For 2012

Its that time of year again! In IR-2011-103, which can be found here, the Internal Revenue Service (the “IRS”) has announced the pension plan limits that will apply in 2012. These limits include the following:

–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 401(k), 403(b) and 457(b) plans for those aged 50 and over remains unchanged at $5,500.

–The limitation on the annual benefit under a defined benefit plan under section 415(b)(1)(A) of the Code is increased from $195,000 to $200,000.

–The limitation for defined contribution plans under section 415(c)(1)(A) of the Code is increased from $49,000 to $50,000.

–The annual compensation limit under sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) of the Code is increased from $245,000 to $250,000.

–The dollar limitation under section 416(i)(1)(A)(i) of the Code concerning the definition of key employee in a top-heavy plan is increased from $160,000 to $165,000.

–The limitation used in the definition of highly compensated employee under section 414(q)(1)(B) of the Code is increased from $110,000 to $115,000.

See IR-2011-103 for the more technical limits.