On October 20, 2011, the Internal Revenue Service published news release IR-2011-103, which details the cost-of-living adjustments for dollar limitations for pension plans and other retirement-related benefits for the 2012 tax year.
Of particular note for plan sponsors is the fact that the elective deferral limit has been increased from $16,500 to $17,000 and the annual limitation for contributions to defined contribution plans increased from $49,000 to $50,000. In addition, the annual compensation limit increased from $245,000 to $250,000. This is the first increase in those areas since the current limits went into effect for 2009.
If you have any questions regarding the IRS announcement or its impact on your plan, please contact an Employee Benefits and Executive Compensation attorney in the Employment, Labor, Benefits & Immigration practice group.