The Internal Revenue Service (IRS) has announced cost-of-living adjustments affecting limits on contributions to pension plans and other retirement-related items for 2011. In general, these limits will remain unchanged from 2010, and any inflation adjustments will be small. Highlights include:
- The elective deferral or contribution limit for employees who participate in 401(k), 403(b), or 457(b) plans, and the federal government's Thrift Savings Plan remains at $16,500.
- The catch-up contribution limit under those plans for those aged 50 and over is unchanged at $5,500.
- The limitation for defined contribution plans under Section 415(c)(1)(A) is unchanged at $49,000.
- The dollar limitation under Section 414(q)(1)(B) concerning the definition of "key employee" is unchanged at $110,000.
- The limitation for a key employee in a "top-heavy plan" remains at $160,000.
For details: www.irs.gov/newsroom/article/0,,id=229975,00.html