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IRS Announces COLA Increases for Dollar Limitations on Benefits and Contributions

On October 18, 2012 the Internal Revenue Service (IRS) announced the cost-of-living adjustments (COLA) impacting tax-qualified pension plans for 2013. Similar to 2012, there are increases in most of the pension plan limitations as the cost-of-living index increase met the statutory thresholds that trigger adjustments. The following table highlights some of the key limits that affect tax-qualified pension plans.

Code Section

2013

2012

401(a)(17)/404(l)
Annual Compensation

$255,000

$250,000

402(g)(1)
Elective Deferrals

17,500

17,000

414(v)(2)(B)(i)
Catch-up Contributions

5,500

5,500

415(b)(1)(A)
Defined Benefit Plan Limit

205,000

200,000

415(c)(1)(A)
Defined Contribution Plan Limit

51,000

50,000

457(e)(15)
Deferral Limits

17,500

17,000

414(q)(1)(B)
Highly Compensated Employee Threshold

115,000

115,000

409(o)(1)(C)

ESOP Limits

1,035,000

205,000

1,015,000

200,000

416(i)(1)(A)(i)
Key Employee

165,000

165,000

408(p)(2)(E)
SIMPLE Max. Contributions

12,000

11,500

414(v)(2)(B)(ii)
SIMPLE Catch-up Contributions

2,500

2,500

408(k)(2)(C)
SEP Min. Compensation

550

550

408(k)(3)(C)
SEP Max. Compensation

255,000

250,000

1.62-21(f)(5)(i)
Control Employee

100,000

100,000

1.62-21(f)(5)(iii)
Control Employee

205,000

205,000

Social Security Tax Wage Base

113,700

110,100

Jason Rothman is a shareholder in the Cleveland office of Ogletree Deakins and is a member of the employee benefits practice group.

October 19, 2012 | TAGS: , , , .