Most of the 2009 retirement plan limits are unchanged because the Consumer Price Index didn’t meet the statutory thresholds that cause them to increase.

Here are IRS’ annual cost-of-living adjustments that apply to how much employees can contribute to qualified retirement plans, and other related items:

• Maximum 401(k), 457(e)(15) elective deferrals – remains at $16,500 for 2010
• Catch-up contributions for 401(k), 403(b) and 457 plans for employees age 50 or over – $5,500 in 2009 and 2010
• SIMPLE deferrals – $11,500 in 2009 and 2010
• Catch-up contributions for SIMPLE plans – remains $2,500 in 2010
• SEPs [408(k)(2)(C)] – is unchanged from 2009, at $550
• Maximum compensation for benefit accruals [401(a)(17) and 404(l)] (plan year and limitation year limit) –$245,000 for 2009 and 2010
• Max. annual additions/benefits [415(c)(1)(A)] (limitation year limit) for defined contribution plans – 100% of compensation or $49,000, the same as in 2009
• Max. additional additions/benefits [415(b)(1)(A)] (limitation years ending after 12/31/09) for defined benefit plans – remains $195,000 in 2010
• Highly compensated employee under Section 414(q)(1)(B) – will be unchanged in 2010, at $110,000
• Key employee-officer in a top-heavy plan – remains $160,000 in 2010, and
• Definition of a “control employee” for fringe benefit valuation purposes – will be $95,000, unchanged from 2009. The compensation amount under Section 1.6121(f)(5)(iii) remains at $195,000 in 2010.

Click here to see the full IRS announcement on  adjustments.

Contribution rates

Many employees need help understanding the advantages of a “pretax benefit,” like an FSA.

Concrete example: Ask them to estimate how much they expect to pay in out-of-pocket medical expenses throughout the year. Then show how much more they would pay with tax. To put it in numbers, $300 placed in an FSA would be roughly equal to $384 worth of taxable income.

Note: Make sure employees are clear on the maximum dollar amount/maximum salary percentage that can be contributed to an FSA.

Eligible expenses

It’s important employees know what expenses their FSAs can be used to reimburse.

In many cases, workers know FSAs reimburse out-of-pocket costs that aren’t otherwise covered, such as copays, deductibles or services like vision and dental care.

But folks may not know certain over-the-counter meds are also eligible for reimbursement.

Combination of benefits

If your company offers additional pretax benefits — such as a 401(k) — encourage employees to contribute to the FSA as well, even if it’s a small contribution.

Reason: With money in multiple pretax accounts, employees reduce their taxable income.

Contribution limits for defined-benefit and defined-contribution plans will not change for 2010.

Limits are adjusted each year using a formula based on inflation.

And because recent inflation has been minimal, these limits will remain:

• $16,500 for 401(k), 403(b) and 457 plans (plus an additional $5,500 for those 50 or older by the end of 2009)
• $11,500 for SIMPLE plans (plus an additional $2,500 for those 50 or older by the end of 2007)
• $5,000 for traditional and ROTH IRAs (plus an additional $1,000 for those 50 or older by the end of 2009)
• $49,000 for defined-contribution KEOGH plans, and
• $195,000 for defined-benefit pension plans.

Not according to recent trends. 401(k) participation over the past year has remained strong despite the fact that 71% of American workers are now living paycheck to paycheck, a new survey by the American Payroll Association has found.

In fact, 82% of workers with access to a 401(k) say they’re still making contributions.

Of those still contributing, 19% have raised their contribution level and 19% have lowered it since Sept., 2008.

Employees happy with their plans

More good news: The majority of employees (54%) are satisfied with their company’s retirement plan, and 61% say they view their employer’s plan as the primary vehicle to save for retirement, according to recent research from Watson Wyatt.

Another 29% admitted they wouldn’t save for retirement without it.

Some other findings from the Watson Wyatt survey:

• More employees (62%) with a defined-benefit (DB) plan are satisfied with their retirement plan than those with only a defined-contribution (DC) plan (51%)
• 46% of employees say they’d be willing to pay a higher amount out of their paycheck to ensure a guaranteed retirement benefit, and
• 52% of employees with a DB plan say their company’s retirement plan is a key reason they continue to work for their employer — only 33% of those with a DC plan say the same.

Heads up: You may soon be required to provide employees with more info about the administrative and management fees that cut into their retirement savings.

The House Education and Labor Committee has approved the 401(k) Fair Disclosure and Pension Security Act.

It would require all employers to fully disclose all retirement plan fees to their workers.

The bill could pass the House very shortly. If it does, employers would have to provide info on four categories of fees:

• administrative
• investment management
• transaction, and
• any other expenses.

The true effect of fees

Currently, the industry median for total 401(k) fees is about 1.5%, according to the Investment Company Institute.

How big an impact would those kinds of fees have on an individual’s savings?

An account with a 1.5% fee with a balance of $20,000, earning 7% a year, would be worth $58,000 after 20 years.

The balance of the same account would be worth $70,000 — or 17% more — if its fees were only .5%.

Other requirements

As it stands now, the legislation requires:

• 401(k) plans to disclose, in a quarterly statement, fees taken from a participant’s account
• plan administrators to offer participants at least one low-cost index fund in order to receive protection against liability for participants’ investment losses, and
• workers to get investment advice based on their needs — not the financial interest of those providing the advice.

Getting health insurance coverage for themselves and their families.

In fact, health insurance currently trumps all worker concerns except “generating current income,” according to the 2009 National Consumer Survey on Personal Finance released by the Certified Financial Planner Board of Standards.

Here’s what employees are concerned about today:

• Generating current income (59%)
• Providing health insurance coverage (55%)
• Managing or reducing debt (53%)
• Building a retirement fund (51%)
• Creating an emergency fund (47%)

Education efforts a success

While obtaining benefits like health insurance and 401(k) contributions are big concerns, only 23% of workers are worried about managing these benefits.

So employers’ efforts to educate workers about their benefits appear to be paying off.

Investment-adviser Web site motleyfool.com recommends you avoid these five mistakes to give yourself a better chance at building a comfortable nest egg:

1. Procrastinating. Those who fail to plan … well, you know the rest. A surefire way to make mess of retirement planning is to avoid retirement planning. Putting it off “for a couple of days” soon turns into a couple of years, and the next thing you know, you’re pawning that gold watch for a couple of cans of tuna — and not the fancy albacore, we might add.
2. Skipping an employer plan. If your firm has a 401(k) or similar plan and you’re not in it, hit yourself in the face with your fist. If your firm has a matching-contribution plan and you’re still not in it, use a baseball bat instead of your fist. You’re missing out on tax savings, compounding and free money. If you have the money taken right out of your paycheck, you’ll hardly miss the amount after a while.
3. Saving for college first. Look at it this way: If you put all your spare money into a college fund for your kids, do you think they’re going to fund your retirement? Good luck with that. That’s not to say you shouldn’t try to save for your children’s education, but your retirement is the first priority.
4. Investing too conservatively. The recent market meltdown was enough to scare anyone into putting money into only the safest — and lowest paying — investments. Most advisers say that’s a mistake, especially if you’re more than five years from retirement. Putting your money in blue chips is OK, however. Better there than in ultraconservative holdings.
5. Investing too aggressively. This of course  is the flip side of the too-conservative approach. Some may feel they have to catch up — quickly — for recent market losses by taking chances on risky stocks. Don’t do it. Stick with solid, moderate-risk investments. And the diversity rule is: Don’t put yourself in a position where the failure of one part of your investments dooms your whole portfolio.

Why the rush to find greener pastures?

• 66% of American workers are not satisfied with their compensation
• 68% aren’t happy with their employer’s contributions to their 401(k) plans
• 78% don’t like their company’s retention efforts, and
• 76% aren’t satisfied with career growth opportunities at their company.

Those figures come from Adecco’s new American Workplace Insights survey.

Boosting job satisfaction

Four ways companies can pump up satisfaction among workers, according to Adecco:

1. Make retention efforts more visible to workers. Companies and managers may be doing all they can to retain employees, but those efforts need to be seen by the workforce.

2. Explain salary decisions. If you suspect salaries aren’t sitting well with workers, explain the reasons behind lower pay. Help them see it’ll help the company through this economy.

3. Provide non-cash rewards. Put in extra effort where extra investment is not possible. Just recognizing good work — though e-mail, handwritten letters, etc. — can boost morale and ease compensation complaints.

4. Show employees where they can grow. When employees are given a map of what they need to do to move up in the organization they are more likely to invest their time and energy to help that business grow.

Among the recommendations in the report:

• Congress should change the law that bars 401(k) plan participants from making new contributions until six months after making a hardship withdrawal. GAO wants workers to have the option to replenish their retirement accounts almost immediately after making hardship withdrawals.
• The U.S. Labor Department should encourage employers to post on their  Web sites information on the long-term impact early withdrawals can have on employees’ 401(k) balances. For example, employers could provide participants with tools to help them calculate the long-term impact of early withdrawals of funds.
• Employers should provide employees who leave the company with projections showing how their account balances would compare at retirement if left in the plan or taken as a lump-sum distribution.

The report will and recommendations will be reviewed by the Senate Special Committee on Aging before any legislation is proposed.

Here are four ways to hold off rising retirement plan costs now:

1. Revisit and compare. The first step is to determine exactly how much your firm is paying (administrative fees, management fees, etc.), as well as how the plan has performed. Next, do a side-by-side comparison with the competition.

Reason: It’s true that most retirement plans have struggled over the last year, but certain plans have had much more positive results than others. Enlisting the help of a benefits consultant or an outside advisor can also be very helpful here.

2. Renegotiate, renegotiate, renegotiate. The market has hurt everyone — including retirement plan providers. The last thing they need is to lose valuable customers, so many will be open to renegotiating your current rates.

Key: For better deals, come to the renegotiation process armed with bids from the competition.

3. Check out small-business-friendly providers. Certain retirement plan providers base fees on factors such as service offerings and the number of plan participants — regardless of what assets are in the plan.

For small firms, especially those with lots of assets, this type of fee structure can be extremely beneficial.

4. Bundle services. Does your provider have any major price hikes in the works? If so, it may be worth it to try brokering a deal with one of your other service providers.

For example, a NY-based company was hit with a $3,000 charge to reinstate its 401(k). Instead of giving in, the firm opted to change providers. It went with the company that handled its payroll, which offered a discount. The company ended up saving $500 a year.