IRS Announces Cost of Living Adjustment (COLA) Limits for 2013 Applicable to Retirement Plans

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The Internal Revenue Service has announced cost of living adjustments (COLA) applicable to dollar limitations for retirement plans for 2013.

Employers should make sure that the individuals in charge of their payroll systems and relevant communication materials are updated and plan administration is aware of these limits. 

Limit

2013

2012

Maximum annual compensation that may be taken into acount for determinig benefits or contributions $255,000 $250,000
Maximum 401 (k) and 403 (b) deferral contribution limit $17,500 $17,000
Maximum 457 (b) deferral contribution limit $17,500 $17,000
Maximum 401 (k) and 403 (b) and governmental 457 (b) catch-up contribution limit for participants age 50 or older $5,500 $5,500
Defined contribution maximum annual addition $51,000 $50,000
Defined benefit maximum annual benefit $200,000 $195,000
Key employee top-heavy plan $165,000 $165,000
Highly compensated employee compensation threshold $115,000 $115,000
Maximum SIMPLE Retirement Account contribution limit $12,000 $11,500
Social Security taxable wage base (FICA) $113,700 $110,100

More information on the new COLA limits can be found by visiting the IRS website at http://www.irs.gov/Retirement-Plans

Topics:  401k, 403(b) Plans, COLA, Defined Benefit Plans, Defined Contribution Plans, Employee Benefits, IRS, Retirement Plan

Published In: Finance & Banking Updates, Labor & Employment Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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