Government Limits on Retirement Plans
Our thanks to our record keeper, Alliance Benefit Group for providing the following information about recent changes to the tax laws affecting retirement plans.
The Internal Revenue Service has announced cost-of-living adjustments to certain employee benefit plan dollar limitations for 2008. The 2008 limitations are as follows:
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The 2008 calendar year 401(k) contribution limitation remains the same as 2007: $15,500.
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The 2008 calendar year catch-up contribution limitation has remained unchanged at $5,000.
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The 2008 deferral limit for a 457 plan remains the same as 2007: $15,500.
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The 2008 deferral limit for SIMPLE plans has remained unchanged at $10,500.
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For 2008, the compensation limit used to determine highly compensated employee status has been increased to $105,000 from $100,000 in 2007 (for determinations in 2009).
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The 2008 annual compensation limit on which contributions to qualified pension, profit sharing and stock bonus plans are calculated has been increased to $230,000 from $225,000 in 2007.
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The maximum benefit under a defined benefit plan has been increased to $185,000 for plan years beginning in 2008 from $180,000 in 2007. The maximum annual addition to defined contribution plans has been increased to $46,000 in 2008 from $45,000 in 2007 (note also, that the limit remains at 100% of compensation).
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The Social Security taxable wage base has been increased to $102,000 in 2008 from $97,500 in 2007.
As a reminder,
elective deferral contributions and loan payments must be segregated
from corporate assets as soon as administratively possible. If you are
not sending in contributions on a per payroll basis, please contact
Alliance Benefit Group to make arrangements to do so to avoid any
potential penalties.
If you
have any questions, please call your Retirement Plan Administrator at
1-800-898-9344.
Alliance Benefit Group is not engaged in the practice of law. This document is intended for general informational purposes only and should not be construed to be legal advice or as a legal opinion on any set of circumstances.
For more information, please contact Mandy Richards.
Retirement Trust Staff