Wipfli Alerts & Updates: Updated Employee Benefit Plan and IRA Quick Reference Table 2012 & 2013

October 23, 2012
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The Internal Revenue Service has announced the cost-of-living adjustments applicable to dollar limitations for various qualified retirement plans and other amounts for 2013. Many of the pension plan limitations will change for 2013 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. Plan sponsors should verify that their administrative and payroll systems reflect the appropriate limits. Communications that specify benefit plan limits should be reviewed for accuracy before materials are given to participants.

  2013 2012
Compensation limit—IRC Sec. 401(a)(17) $255,000 $250,000
Defined benefit plan annual benefit limit $205,000 $200,000
Defined contribution plan annual contribution limit  $51,000  $50,000
Social Security tax wage base  $113,700  $110,100
Highly compensated employee compensation threshold  $115,000  $115,000
Key employee officer compensation threshold  $165,000  $165,000
SEP compensation threshold  $550  $550
401(k), 403(b), and SARSEPs    
Annual deferral limit(2)  $17,500  $17,000
Catch-up contribution(3)  $5,500  $5,500
457 Plan    
Annual deferral limit(2)  $17,500  $17,000
Catch-up contribution(3)  $5,500  $5,500
SIMPLE Plan    
Annual deferral limit(2)  $12,000  $11,500
Catch-up contribution(3)  $2,500  $2,500
Annual deferral limit(2)  $5,500  $5,000
Catch-up contribution(3)  $1,000  $1,000
Traditional IRA deduction phaseout (AGI)    
Unmarried—active participant $59,000/$69,000 $58,000/$68,000
MFS—any spouse participates $0/$10,000 $0/$10,000
MFJ—nonparticipating spouse $178,000/$188,000 $173,000/$183,000
MFJ—participating spouse $95,000/$115,000 $92,000/$112,000
Roth IRA contribution eligibility (AGI)    
Joint return $178,000/$188,000 $173,000/$183,000
Single and HOH $112,000/$127,000 $110,000/$125,000
MFS—any spouse participates $0/$10,000 $0/$10,000
(1) This table has been updated based on IRS Announcement IR-2012-77, October 18, 2012.
(2) This applies to the total of all elective deferrals an individual makes for the year to 401(k) plans, 403(b) plans, SARSEPs, and SIMPLE plans. However, deferrals to each SIMPLE plan in which the individual participates are also limited, as shown later in the table.
(3) Catch-up contributions are available each year to individuals who reach age 50 by the end of the year.

If you have any questions, or for more information about the 2013 cost-of-living adjustments for retirement plans, please contact Pamela Branshaw, Thomas Krieg, Robert Buss, or your Wipfli relationship executive.

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