Most retirement plan dollar limits are changed for 2012

The IRS has announced the 2012 cost-of-living adjustments (COLAs) for retirement plans. Most of the limits related to pension and other retirement plans, are changed for 2012.

Karen Dixon from Qualified Plan Administrators, Inc. publishes a nice table of the annual limits.  Click here to see the table.

The following plan limits are increased effective Jan. 1, 2012:

  • Defined benefit plans. The limitation on the annual benefit under a defined benefit plan  is increased from $195,000 to $200,000
  • Defined contribution plans. The limit on the annual additions to a participant’s defined contribution account is increased from $49,000 to $50,000
  • Annual compensation limit. The maximum amount of annual compensation that can be taken into account for various qualified plan purposes is increased from $245,000 to $250,000
  • Elective deferrals. The Code Sec. 402(g)(1) limit on the exclusion for elective deferrals  is increased from $16,500 to $17,000
  • Deferred compensation plans. The limit on deferrals concerning deferred compensation plans of state and local governments and tax-exempt organizations, is increased from $16,500 to $17,000
  • Key employee in top-heavy plan. The dollar limit relating to the definition of key employee in a top-heavy plan is increased from $160,000 to $165,000
  • ESOP five-year distribution period. The dollar amount for determining the maximum account balance in an employee stock ownership plan (ESOP) subject to a five-year distribution period is increased from $985,000 to $1,015,000, while the dollar amount used to determine the lengthening of the five-year distribution period is increased from $195,000 to $200,000
  • Highly compensated employee. The dollar limit used in defining a highly compensated employee  is increased from $110,000 to $115,000

If you have any questions regar

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