IRS Announces Cost-of-Living Adjustments Applicable to Defined Contribution Plans and Defined Benefit Plans

The IRS announced cost-of-living adjustments applicable to the 2012 tax year that impact defined contribution and defined benefit plan limits. The limitation on elective deferrals was increased from $16,500 to $17,000. However, the limitation for catch-up contributions by participants who are age 50 or older remains at $5,500. The Code Section 415 limit applicable to defined contribution plans increased from $49,000 to $50,000, and the annual compensation limit under Code Section 401(a)(17) increased from $245,000 to $250,000. The limitations used to determine key employees was increased from $160,000 to $165,000, and the highly compensated employee limit was increased from $110,000 to $115,000. The annual benefit limit for defined benefit plans was increased from $195,000 to $200,000. Information on these (and other adjustments) can be found here.