Wipfli Alerts & Updates: Updated Employee Benefit Plan and IRA Quick Reference Table 2011 & 2012
November 3, 2011
The Internal Revenue Service has announced the cost-of-living adjustments applicable to dollar limitations for various qualified retirement plans and other amounts for 2012. For the first time in the last three years, most of the figures published will increase. 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.
| 2012 | 2011 |
Compensation limit—IRC Sec. 401(a)(17) | $250,000 | $245,000 |
Defined benefit plan annual benefit limit | $200,000 | $195,000 |
Defined contribution plan annual contribution limit | $50,000 | $49,000 |
401(k), 403(b), and SARSEPs | | |
Annual deferral limit(2) | $17,000 | $16,500 |
Catch-up contribution(3) | $5,500 | $5,500 |
457 Plan | | |
Annual deferral limit(2) | $17,000 | $16,500 |
Catch-up contribution(3) | $5,500 | $5,500 |
SIMPLE Plan | | |
Annual deferral limit(2) | $11,500 | $11,500 |
Catch-up contribution(3) | $2,500 | $2,500 |
IRA | | |
Annual deferral limit(2) | $5,000 | $5,000 |
Catch-up contribution(3) | $1,000 | $1,000 |
Highly compensated employee compensation threshold | $115,000 | $110,000 |
Key employee officer compensation threshold | $165,000 | $160,000 |
SEP compensation threshold | $550 | $550 |
Traditional IRA deduction phaseout (AGI) | | |
Unmarried—active participant | $58,000/$68,000 | $56,000/$66,000 |
MFS—any spouse participates | $0/$10,000 | $0/$10,000 |
MFJ—nonparticipating spouse | $173,000/$183,000 | $169,000/$179,000 |
MFJ—participating spouse | $92,000/$112,000 | $90,000/$110,000 |
Social Security tax wage base | $110,100 | $106,800 |
Roth IRA contribution eligibility (AGI) | | |
Joint return | $173,000/$183,000 | $169,000/$179,000 |
Single and HOH | $110,000/$125,000 | $107,000/$122,000 |
MFS—any spouse participates | $0/$10,000 | $0/$10,000 |
Eligibility for rollover to Roth IRA (AGI) | | |
Joint return, single, and HOH | Allowed(4) | Allowed(4) |
MFS | Allowed(4) | Allowed(4) |
(1) This table has been updated based on IRS Announcement IR-2001-103, October 20, 2011. |
(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. |
(4) Effective for years beginning after 2009, there is no AGI limit for Roth rollovers. Also, MFS taxpayers are allowed to make Roth IRA rollovers. |
If you have any questions, or for more information about the 2012 cost-of-living adjustments for retirement plans, please contact Pamela Branshaw, Thomas Krieg, Robert Buss, or your Wipfli relationship executive.
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