NEWSLETTERS
Volume 2,
Issue 1 .................................................................................................................................................January
2001
Cost of Living Adjustments
LIMIT
1999
2000
LIMIT
1999
2000
Defined Benefit Plans—The
maximum dollar limitation for annual benefits
Under defined benefit plans under IRC Section 415(b)(1)(A). The limitation
for annual benefits is the lesser of the current dollar amount (as
adjusted for inflation) or 100% of the participant’s average compensation
for his highest 3 years.
|
$135,000 |
$140,000 |
401(k)/403(b)/Existing
SARSEP Elective
Deferral Limit—The limitation
on cumulative elective deferrals to a
401(k), 403(b) tax deferred annuity,
simplified employee pension in a tax
year, as coordinated under IRC Section
402(g)(1).
|
$10,500 |
$10,500 |
| 403(b) Catch Up Limit–
The special catch-up election for employees participating in a 403(b) tax
deferred annuity who have had at least 15 years of service with an
educational organization, hospital, home health agency, health and welfare
service agency, church or convention or association of churches. |
$13,500 |
$13,500 |
Compensation Limit—The annual limit
of compensation that may be taken into account for contribution purposes
in accordance with IRC Section 401(a)(17). |
$170,000 |
$170,000 |
Defined Contribution Plan
415
Dollar Limit—The dollar limitation for annual additions under defined
contribution plans under IRC Section 415(c)(1)(A). The limitation for
annual additions is the lesser of the current dollar amount (as adjusted
for inflation) or 25% of compensation.
|
$30,000 |
$35,000 |
Definition of
Highly Compensated Employees—The compensation
threshold used for determining highly compensated employees under IRC
Section 414(q)(1)(B). |
$85,000 |
$85,000 |
| 457 Deferral Limits—The
limitation for deferrals to 457 plans under IRC Sections 457(b)(2) and
(c)(1). Contributions under an eligible 457 deferred compensation plan are
limited to the lesser of 33% of includible compensation of the current
dollar amount.
|
$8,000 |
$8,500 |
SIMPLE
Retirement
Accounts—Compensation taken into account that an
employee may elect to defer under a SIMPLE retirement plan described in
IRC Section 408(p)(2).
|
$6,000 |
$6,500 |
| |
|
|
Compensation for SEPs—Compensation
taken into account to determine eligibility for simplified employee
pensions (SEPs). |
$450 |
$450 |
The Social Security Administration also released its cost of
living adjustments for 2001:
Taxable Wage Base 2000 2001
For Social Security $76,200 $80,400
Released by the Internal Revenue Service in its October announcement
detailing cost-of-living adjustments to certain dollar limits for retirement
plans. These adjustments went into effect January 1, 2001. This information is
provide to you by Administrative Retirement Service, Inc.
If you have additional questions, please call us at 630-469-2030.
© Administrative
Retirement Services, Inc. 2000
Published
by Administrative Retirement Services, Inc., E-mail address: arsinc@prodigy.net.
Copyright 2001 by Administrative Retirement Services, Inc. Reproduction
in whole or in part is prohibited except by written permission. All rights
are reserved. Information has been obtained by Administrative Retirement
Services, Inc. from sources believed to be reliable. However, because of
the possibility of human or mechanical error by our sources, Administrative
Retirement Services, Inc. or others, Administrative Retirement Services,
Inc. does not guarantee the accuracy, adequacy, or completeness of any
information and is not responsible for any errors or omissions or the result
obtained from the use of such information. Readers should seek specific
advice before acting with regard to the subjects mentioned here.
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