Let your Finance people know that for 2010, many employees looking to sock away more for retirement won’t be able to boost their payroll deductions.
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.
