In IR-2012-77, the Internal Revenue Service (“IRS”) announced the cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2013. The IRS said that, in general, many-but not all- of the pension plan limitations will change for 2013, since the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. Some highlights:
–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 generally increased from $17,000 to $17,500.
–The catch-up contribution limit for employees aged 50 and over who participate
in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan generally remains unchanged at $5,500.
–Effective January 1, 2013, the limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) of the Code is increased from $200,000 to $205,000.
–The limitation for defined contribution plans under Section 415(c)(1)(A) of the Code is increased in 2013 from $50,000 to $51,000.
–The annual compensation limit under Sections 401(a)(17) of the Code is increased from $250,000 to $255,000.