The Internal Revenue Service (IRS) recently announced cost-of-living adjustments to the applicable dollar limits for various employer-sponsored retirement and welfare benefit plans for 2012. For the first time since 2009, the IRS has increased many employee benefit plan limits. As a result, employers should update payroll and plan administration systems accordingly and review plan-related documents and communications to incorporate these new limits.
Following is a list of some of the new annual limits for 2012 as well as the 2011 limits:
|
Retirement Plan Limits |
New 2012 |
Old 2011 |
| Annual Maximum Compensation Limit |
$250,000 |
$245,000 |
| Elective Deferral Limit for 401(k), 403(b), 457(b) plans |
$17,000 |
$16,500 |
| Catch-Up Contribution Limit for 401(k), 403(b) & Governmental 457(b) plans (only if age 50 or older) |
$5,500 |
$5,500 |
| Annual Contribution Limit for Defined Contribution Plans under Code Section 415 (employer/employee combined) |
$50,000 |
$49,000 |
| Annual Benefit and Accrual Limit for Defined Benefit Plans under Code Section 415 |
$200,000 |
$195,000 |
| Minimum Threshold to be Considered a Highly Compensated Employee (HCE) Based on Compensation |
$115,000 |
$110,000 |
| Minimum Threshold for an Officer of the Employer to be Considered a Key Employee in a Top-Heavy Plan |
$165,000 |
$160,000 |
| Maximum Social Security Taxable Earnings (OASDI only) |
$110,100 |
$106,800 |
| Maximum Medicare Taxable Earnings (HI Only) |
No Limit |
|
The new annual health savings account (HSA) and high-deductible health plan (HDHP) limits for 2012 (as well as the current limits for 2011) are as follows:
|
Health Savings Accounts |
New 2012 |
Old 2011 |
| HSA Contribution Limits: | ||
| Self-Only |
$3,100 |
$3,050 |
| Family |
$6,250 |
$6,150 |
| Catch-Up (for individuals age 55 or older) |
$1,000 |
$1,000 |
| HDHP Minimum Deductible: | ||
| Self-Only |
$1,200 |
$1,200 |
| Family |
$2,400 |
$2,400 |
| HDHP Out-of-Pocket Expense Limit (deductibles, co-payments, etc., but not premiums): | ||
| Self-Only |
$6,050 |
$5,950 |
| Family |
$12,000 |
$11,900 |
If you have questions, please contact Tara Slone (tslone@wp.hallrender.com or 248.457.7870) or your regular Hall Render attorney.
