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5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
The IRS has released the 2009 cost-of-living adjustments to retirement plan limits. As a result of the new COLAs, nearly all dollar limitations on benefits and contributions, annual compensation limits, compensation amounts for SEPs, and other dollar limitations applicable to retirement plans will increase in 2009.
Employee benefit plans are subject to annually adjusted dollar limitations on benefits, contributions, compensation and other items. Annual benefit limits are generally calculated based on inflation data from the third fiscal quarter of each year. Adjustments in the limits are rounded down and may not take effect until certain minimum dollar amounts are reached. Other than for catch-up contributions for SIMPLE plans, the increase in the cost of living index met the statutory thresholds that trigger their adjustments.
2009 plan limits
Highlights of the 2009 maximum dollar limitations announced by the IRS include the following:
- Annual defined benefit limit: $195,000, an increase from $185,000 in 2008;
- Annual defined contribution limit: $49,000, an increase from $46,000 in 2008;
- Annual compensation limit: $245,000, an increase from $230,000 in 2008;
- 401(k) elective deferrals: $16,500, an increase from $15,500 in 2008;
- Annual limit for SIMPLE plans: $11,500, an increase from $10,500 in 2008;
- SEP coverage amount: $550, an increase from $500 in 2008; and
- Highly compensated employee limit: $110,000, an increase from $105,000 in 2008.
The contribution amount allowed for Roth IRAs begins to phase out for joint filers with incomes exceeding $166,000, up from $159,000 in 2008, and phases out for singles and heads of households with incomes exceeding $105,000, up from $101,000 in 2008.
The compensation amount under IRS Reg. Sec. 1.61-21(f)(5)(i) concerning the definition of “control employee” for fringe benefit valuation purposes is $95,000, an increase from $90,000 in 2008. The compensation amount under IRS Reg. Sec. 1.61-21(f)(5) (iii) will increase to $195,000 from $185,000 in 2008.
According to the IRS, administrators of defined benefit or defined contribution plans that have received favorable determination letters should not request new determination letters solely because of yearly amendments to adjust maximum limitations in the plans.
A comparison of the 2009 dollar limitations to pay higher taxes as a result of the increase in the 2008 figures appears in the chart below.
MAXIMUM DOLLAR LIMITS
2009
2008
Elective
Deferrals........................................................$16,500
................$15,500
Catch-up Contributions (non-SIMPLE) ..................................5,500
...................5,000
Annual Defined Benefit
Limit...........................................195,000
................185,000
Annual Defined Contribution Limit.....................................49,000
..................46,000
Annual Compensation Limit............................................245,000
................230,000
Grandfathered Compensation Rule for Government Plans ......360,000
................345,000
Deferrals for Government Plans.......................................16,500
..................15,500
Highly Compensated Employee Limit................................110,000
................105,000
SIMPLE Plan Employee Deferrals......................................11,500
..................10,500
Catch-up contributions (SIMPLE)......................................2,500
....................2,500
SEP
Coverage................................................................550
.......................500
SEP Compensation Amount............................................245,000
................230,000
Tax Credit ESOP Maximum Balance ..................................985,000
................935,000
Amount for Lengthening of 5-Year ESOP Period ..................195,000
................185,000
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