2013 is around the corner, and that means updated pension plan limitations. Last week, the IRS announced the 2013 limits, many of which will increase in 2013 due to the increase in the cost of living index. Some of the highlights include:
- For defined benefit plans, the maximum annual benefit for a participant with at least ten years of participation and a normal retirement age between 62 and 65 was increased from $200,000 to $205,000.
- For defined contribution plans (profit sharing and 401(k) plans), the maximum annual contribution for a participant was increased from $50,000 to $51,000. This limit includes deferrals but does not include catch up contributions.
- The limit on salary deferrals for 401(k) plans increased from $17,000 to $17,500, and the limit on catch up contributions for 401(k) plans, which are available to participants who attain age 50 by the end of 2013, remained the same at $5,500.
- The compensation limit used in determining benefits and contributions for both defined benefit and defined contribution plans increased from $250,000 to $255,000.
As 2013 approaches, so does the deadline to install a qualified plan for 2012. If you are interested in setting up a qualified plan, please contact us at 503-520-0848, or www.independentactuaries.com/contact.
For a more complete list of the new 2013 annual limits, please visit the following link on our website: https://www.independentactuaries.com/resources/retirement-plan-limits/