2012 Qualified Plan Cost of Living Increases, 2012 Social Security Taxable Wage Base

October 21, 2011

The Internal Revenue Service has announced the cost-of-living adjustments for the various qualified retirement plan limits. Unlike 2011, almost all of the limits shown below are changed from last year.

Qualified Plan Limit Cost-of-Living Adjustments
401(k) and 403(b) elective deferral limit 2011 – $16,500

2012 – $17,000

$200,000 compensation limit 2011 – $245,000

2012 – $250,000

$160,000 defined benefit limit 2011 – $195,000

2012 – $200,000

$40,000 defined contribution limit 2011 – $49,000

2012 – $50,000

$80,000 definition of highly compensated employee 2011 – $110,000

2012 – $115,000

SIMPLE IRA deferral limit 2011 – $11,500

2012 – $11,500

Code Section 457 deferred compensation plan deferral limit 2011 – $16,500

2012 – $17,000

Code Section 414(v) catch-up contribution limit for employee deferrals 2011 – $5,500

2012 – $5,500

All of the above are plan year limits (i.e., for the plan year which begins in 2012), 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 $110,100 for 2012.

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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