By Mary Ellen Schill
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.
This document provides information of a general nature regarding legislative or other legal developments, and is based on the state of the law at the time of the original publication of this article. None of the information contained herein is intended as legal advice or opinion relative to specific matters, facts, situations, or issues, and additional facts and information or future developments may affect the subjects addressed. You should not act upon the information in this document without discussing your specific situation with legal counsel.
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