2010 Qualified Plan Cost of Living Increases, 2010 Social Security Taxable Wage Base

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October 16, 2009

The Internal Revenue Service has announced the cost-of-living adjustments for the various qualified retirement plan limits. Note that all of the limits shown below are unchanged from 2009, because the relevant cost-of-living index for 2009 is less than the cost-of-living index for 2008, the basis for the cost of living increases.

Qualified Plan Limit Cost-of-Living Adjustments
401(k) and 403(b) elective deferral limit 2009 – $16,500

2010 – $16,500

$200,000 compensation limit 2009 – $245,000

2010 – $245,000

$160,000 defined benefit limit 2009 – $195,000

2010 – $195,000

$40,000 defined contribution limit 2009 – $49,000

2010 – $49,000

$80,000 definition of highly compensated employee 2009 – $110,000

2010 – $110,000

SIMPLE IRA deferral limit 2009 – $11,500

2010 – $11,500

Code Section 457 deferred compensation plan deferral limit 2009 – $16,500

2010 – $16,500

Code Section 414(v) catch-up contribution limit for employee deferrals 2009 – $5,500

2010 – $5,500

All of the above are plan year limits (i.e., for the plan year which begins in 2010), with the exception of the Code Section 401(k) and Code Section 403(b) elective deferral limit, which is a calendar year limitation.

In addition, the Department of Health and Human Services has set the maximum taxable wages for the OASDI portion of the social security tax at $106,800 for 2010.

If you have questions regarding the above, please contact Mary Ellen Schill, the author of this article, or any of the attorneys in the Employment & Benefits Practice Group of Ruder Ware.

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