Retirement and Pension Plans / Cost of Living Adjustments


The I.R.S. has recently issued its annual cost-of-living adjustments applicable in 2011 to qualified retirement (pension, profit-sharing, § 401(k), money purchase and stock bonus) plans. Generally, there has been such a low rate of inflation in the nation’s economy that many of these cost-of-living adjustments will remain unchanged.

In 2011, the maximum amount of annual compensation which may be considered for any single employee participating in such a retirement plan remains unchanged at $245,000. The aggregate annual limit on employer and employee contributions to a retirement plan on behalf of a single employee likewise remains unchanged in 2011 at a level of $49,000 for defined contribution (profit-sharing, § 401(k) and money purchase) plans. Further, the maximum annual benefit which may be funded under a defined benefit pension plan (based on actuarial computations) remains unchanged in 2011 at a level of $195,000.

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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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