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  • Qualified Plans
  • October24th

    No Comments

    The IRS recently announced the 2012 cost of living adjustments applicable to dollar limitations for qualified plans (and other retirement plans) for 2012. Of particular interest, the IRS increased the amount that 401(k) plan participants can defer a portion of their salary from $16,500 to $17,000. For such participants aged 50 and over, these participant are allowed to make an additional catch-up contribution to the 401(k) plan of $5,500 (for a total elective deferral of $22,500).

    Internal Revenue Code (IRC) Section 415 provides for dollar limitations on benefits and contributions under qualified retirement plans. In addition, Section 415 requires the IRS to adjust these limits for cost-of-living increases. Other limitations applicable to qualified plans are also affected by these adjustments. The following is a chart to use for your convenience:

    Code Section 2012 2011 2010
    401(a)(17)/404(l) Annual Compensation $250,000 $245,000 $245,000
    402(g)(1) Elective Deferrals $17,000 $16,500 $16,500
    414(q)(1)(B) Highly Compensated Employee $115,000 $110,000 $110,000
    414(v)(2)(B)(i) Catch Up Contributions (non IRA) $5,500 $5,500 $5,000
    414(v)(2)(B)(ii) Catch Up Contributions (IRA) $2,500 $2,500 $2,500
    415(b)(1)(A) Defined Benefit Limitation $200,000 $195,000 $195,000
    415(c)(1)(A) Defined Contribution Limitations $50,000 $49,000 $49,000
    416(i)(1)(A)(i) Key Employee $165,000 $160,000 $160,000
    457(e) Deferral Limits $17,000 $16,500 $16,500
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  • July13th

    No Comments

    In a notice on its website, the U.S. DOL announced the extension of the applicability date of the fiduciary-level fee disclosure regulation issued under ERISA section 408(b)(2) until April 1, 2012. The Department had previously proposed to extend the applicability date only under January 1, 2012.

    In addition, the DOL also announced an amendment to the applicability date of the participant-level fee disclosure regulation. Initial participant-level disclosures must now be made no later than 60 days after the first day of the plan year beginning after 11/1/11, or if later, 60 days after the effective date of the fiduciary-level fee disclosure regulation. Previously, the DOL had proposed a 120-day transition period to provide these disclosures.

    This was reprinted from ASPPA.

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  • August1st

    No Comments

    The Supreme Court has agreed to hear the case, CIGNA Corp. v Amara, to resolve a dispute among the circuits as to whether a participant must show reliance on a deficient summary plan description or merely “likely harm” when the summary plan description is inconsistent with the plan’s terms. Obviously, a decision by the Supremes for the latter standard will make it more likely that a participant can sue a company over language in the plan’s SPD. We will give you notice of what the Court decides when the decision is rendered.

  • July19th

    No Comments

    The Supreme Court has agreed to review the decision in Amara v. CIGNA Corp, in which the Second Circuit affirmed the district court’s opinion that CIGNA’s cash balance plan conversion violated ERISA § 204(h)’s requirement that plan participants receive advance notice of plan amendments that provide for a significant reduction in the rate of plan participants’ future benefit accrual.

  • October19th

    No Comments

    Last week, the IRS announced the cost of living adjustments applicable to dollar limitations for pension plans and other items for 2010; or rather, they announced, generally, that there would be no change to these limits from the 2009 limits.

    Internal Revenue Code (IRC) Section 415 provides for dollar limitations on benefits and contributions under qualified retirement plans.  In addition, Section 415 requires the IRS to adjust these limits for cost-of-living increases.  Other limitations applicable to qualified plans are also affected by these adjustments.  The following is a chart to use for your convenience:

    Code Section

    2010

    2009

    2008

    401(a)(17)/404(l) Annual Compensation

    $245,000

    $245,000

    $230,000

    402(g)(1) Elective Deferrals

    $16,500

    $16,500

    $15,500

    414(q)(1)(B) Highly Compensated Employee

    $110,000

    $110,000

    $105,000

    414(v)(2)(B)(i) Catch Up Contributions (non IRA)

    $5,500

    $5,500

    $5,000

    414(v)(2)(B)(ii) Catch Up Contributions (IRA)

    $2,500

    $2,500

    $2,500

    415(b)(1)(A) Defined Benefit Limitation

    $195,000

    $195,000

    $185,000

    415(c)(1)(A) Defined Contribution Limitations

    $49,000

    $49,000

    $46,000

    416(i)(1)(A)(i) Key Employee

    $160,000

    $160,000

    $150,000

    457(e) Deferral Limits

    $16,500

    $16,500

    $15,500

    Please let us know if you have any questions.  Thank you.

    Code Section

    2010

    2009

    2008

    401(a)(17)/404(l) Annual Compensation

    $245,000

    $245,000

    $230,000

    402(g)(1) Elective Deferrals

    $16,500

    $16,500

    $15,500

    414(q)(1)(B) Highly Compensated Employee

    $110,000

    $110,000

    $105,000

    414(v)(2)(B)(i) Catch Up Contributions (non IRA)

    $5,500

    $5,500

    $5,000

    414(v)(2)(B)(ii) Catch Up Contributions (IRA)

    $2,500

    $2,500

    $2,500

    415(b)(1)(A) Defined Benefit Limitation

    $195,000

    $195,000

    $185,000

    415(c)(1)(A) Defined Contribution Limitations

    $49,000

    $49,000

    $46,000

    416(i)(1)(A)(i) Key Employee

    $160,000

    $160,000

    $150,000

    457(e) Deferral Limits

    $16,500

    $16,500

    $15,500