IRS Announces 2011 Pension and Related Limitations
November 8, 2010
On October 28, 2010, the Internal Revenue Service announced that the dollar limitations for pension plans and other items, beginning January 1, 2011, would remain generally unchanged from the limits in effect in 2010. Section 415 of the Internal Revenue Code provides for dollar limitations on benefits and contributions under qualified retirement plans. These limitations usually are adjusted annually to reflect cost-of-living increases. Many other limitations applicable to retirement plans are adjusted at the same time and in the same manner as the Section 415 limit. Some of the limits to be applied in 2011 are listed below.
Maximum Annual Compensation taken into account for determining benefits or contributions to a qualified plan -- $245,000
Basic Elective Deferral Limitation for 401(k), 403(b) and 457(b) Plans -- $16,500
Catch-up Contribution Limit for Persons Age 50 and Older in 402k, 403(b) or SARSEP Plans -- $5,500
Limitation on Annual Additions to a Defined Contribution Plan -- $49,000
- Note, in no event may annual additions exceed 100% of a participant's compensation.
Limitation on Annual Benefits from a Defined Benefit Plan -- $195,000
- Note, in no event may a participant's annual benefit exceed 100% of the participant's average compensation for the participant's high three years.
Highly Compensated Employee Compensation Threshold -- $110,000
- Note, Generally an employee is considered "highly compensated" if the employee: a) was a five-percent owner of the employer at any time during the current or preceding year; or (b) received compensation from the employer in the preceding year of more than the applicable dollar limit for that year.
SEP Compensation Threshold -- $550
Social Security Taxable Wage Base for Social Security Tax (6.2%) -- $106,800
- For Medicare Tax (1.45%) -- No limit
Health Savings Accounts
- Individual Contribution Limit -- $3,050
- Family Contribution Limit -- $6,150
- Catch-Up Contributions -- $1,000
