Day Pitney remains committed to providing quality legal counsel, while protecting our clients and employees, and transforming our communities into more just, equal and equitable spaces. For more information, please visit our COVID-19 Resource Center | Racial Justice and Equity Task Force.

Insights

Publications Events

Internal Revenue Service Publishes 2012 Pension Plan Limitations

Publisher: Day Pitney Alert
October 20, 2011
Day Pitney Author(s) Frank A. Rubinetti

On October 20, the IRS announced cost-of-living adjustments applicable to certain dollar limitations for employee pension benefit plans for 2012:

  • The annual benefit limit for defined benefit plans is increased from $195,000 to $200,000.
  • The annual addition limit for defined contribution plans is increased from $49,000 to $50,000.
  • The Section 402(g) limit with respect to the exclusion for elective deferrals to a 401(k), 403(b) or 457 is increased from $16,500 to $17,000.
  • The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C) and 408(k)(6)(D)(ii) is increased from $245,000 to $250,000.
  • The dollar limit for key employees in a top-heavy plan under Section 416(i)(1)(A)(i) is increased from $160,000 to $165,000.
  • The dollar amount under Section 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan (ESOP) subject to a five-year distribution period is increased from $985,000 to $1,015,000. The dollar amount used to determine the lengthening of the five-year distribution period is increased from $195,000 to $200,000.
  • The dollar limit for catch-up contributions for anyone age 50 and older under Section 414(v)(2)(B)(i) remains unchanged at $5,500, while the limit applicable to those participants under plans subject to Section 414(v)(2)(B)(ii) (i.e., to SIMPLE plans and retirement accounts) remains unchanged at $2,500.
  • The annual compensation limit under Section 401(a)(17) for eligible participants in governmental plans that allowed cost-of-living adjustments to be taken into account for purposes of Section 401(a)(17) is increased from $360,000 to $375,000.
  • The limitation used in the definition of "highly compensated employee" under Section 414(q)(1)(B) is increased from $110,000 to $115,000.
  • A complete list of applicable pension plan limitations can be found on the IRS website here.
Download
Recommended