IRS Announces Pension Plan COLAs for Tax Year 2009
Posted: Friday, October 24, 2008 |  Printer Friendly
The IRS has announced the cost-of-living adjustments (COLAs) applicable to dollar limits on benefits and contributions under qualified retirement plans, as well as other items, for tax year 2009 [IR-2008-118, 10-16-08].
• The limitation on the exclusion for elective deferrals under §402(g)(1) (e.g., §401(k) and §403(b) plans) is increased from $15,500 to $16,500.
• The limit on annual additions to defined contribution plans under §415(c)(1)(A) is increased from $46,000 to $49,000.
• For limitation years ending after December 31, 2008, the limit on the annual benefit under a defined benefit plan contained in §415(b)(1)(A) is increased from $185,000 to $195,000.
• The annual compensation limit under §401(a)(17) and §404(l) is increased from $230,000 to $245,000.
• The compensation amount under §408(p)(2)(E) regarding elective deferrals to SIMPLE retirement accounts is increased from $10,500 to $11,500.
• The limitation under §457(e)(15) concerning elective deferrals to deferred compensation plans of state and local governments and tax-exempt organizations is increased from $15,500 to $16,500.
• The limitation under §416(i)(1)(A)(i) concerning the definition of "key employee" in a top-heavy plan is increased from $150,000 to $160,000.
• The limitation under §414(v)(2)(B)(i) for catch-up contributions to §§401(k), 403(b), and 457 plans for individuals age 50 or over is increased from $5,000 to $5,500; the limitation under §414(v)(2)(B)(ii) for catch-up contributions to an employer's SIMPLE plan for individuals age 50 or over remains unchanged at $2,500.
• The limitation used in the definition of "highly compensated employee" under §414(q)(1)(B) is increased from $105,000 to $110,000.
• The compensation amount under §408(k)(2)(C) regarding simplified employee pensions (SEPs) is increased from $500 to $550.
• The compensation amount under federal regulation §1.61-21(f)(5)(i), concerning the definition of "control employee" for fringe benefit purposes, is increased from $90,000 to $95,000. The compensation amount under §1.61-21(f)(5)(iii) is increased from $185,000 to $195,000.
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