On October 20th the IRS announced cost of living adjustments affecting dollar limitations for pension plans and other retirement related items for Tax Year 2012. Limits are increased from 2011 to 2012 as outlined in the chart below. For information on any limits not listed below please contact us.
|401(k)/403(b) Elective Deferral Limit||$ 16,500||$ 17,000|
|Catch Up Contribution Limit (for those 50 and over)||$ 5,500||$ 5,500|
|Annual Compensation Limit for Qualified Plans||$245,000||$250,000|
|Defined Contribution Annual Limit||$ 49,000||$ 50,000|
|Highly Compensated Employee||$110,000||$115,000|
|Defined Benefit Plan Maximum Dollar Limit||$195,000||$200,000|
|Taxable Wage Base http://www.socialsecurity.gov/OACT/COLA/cbb.html||$106,800||$110,100|
After three years of flat rates, there will be increases for 2012. Employers and their retirement plan administrator should communicate the relevant limits to plan participants in advance of 2012.
Earlier in the year the IRS announced limits for Health Savings Accounts. The contribution limit for individual coverage is $3100 and for family coverage is $6250. There was no change in the minimum annual deductible under a High Deductible Health Plan from 2011; the minimum deductible for 2012 remains at not less than $1200 for individual coverage and $2400 for family coverage.