The agency just released its cost-of-living adjustments that apply to how much employees can contribute to qualified retirement and other plans.
Here’s a breakdown of the increases, by plan type:
- Maximum 401(k), 457(e)(15) elective deferrals – $16,500 ($15,500 in 2008)
- Catch-up contributions for 401(k), 403(b) and 457 plans for employees age 50 or over – $5,500 ($5,000 in 2008)
- SIMPLE deferrals – $11,500 ($10,500 in 2008)
- Catch-up contributions for SIMPLE plans – $2,500 (unchanged)
- SEPs [408(k)(2)(C)] – $550 ($500 in 2008)
- Maximum compensation for benefit accruals [401(a)(17) and 404(l)] (plan year and limitation year limit) – $245,000 ($230,000 in 2008)
- Max. annual additions/benefits [415(c)(1)(A)] (limitation year limit) for defined contribution plans – 100% of compensation or $49,000 ($46,000 in 2008)
- Max. additional additions/benefits [415(b)(1)(A)] (limitation years ending after 12/31/05) for defined benefit plans – $195,000 ($185,000 in 2008)
- Highly compensated employee under Section 414(q)(1)(B) – $110,000 ($105,000 in 2008)
Key employee-officer in a top-heavy plan – $160,000 ($150,000 in 2008) - Definition of a “control employee” for fringe benefit valuation purposes – $95,000 ($90,000 in 2008). The compensation amount under Section 1.6121(f)(5)(iii) is $195,000 ($185,000 in 2008).
Click here to see the official IRS notice of plan changes.
