The Internal Revenue Service announced the 2013 cost-of-living adjustments on October 18, 2012. Here are some of the key limits for 2013 that will affect employer qualified retirement plans:
- The Code section 402(g) limit on elective deferrals for employees who participate in 401(k) and 403(b) plans will increase from $17,000 to $17,500.
- The Code section 415(c) limit for annual additions under defined contribution plans will increase from $50,000 to $51,000.
- The Code section 414(v) catch-up contribution limit for employees aged 50 and over who participate in 401(k) and 403(b) plans will remain unchanged at $5,500.
- The Code section 415(b) annual benefit limit under a defined benefit plan will increase from $200,000 to $205,000.
- The Code section 416(i) dollar limit on compensation for defining a key employee in a top heavy plan will remain unchanged at $165,000.
- The Code section 414(q) dollar limit on compensation for defining a highly compensated employee remains unchanged at $115,000.
- The Code section 401(a)(17) annual compensation limit will increase from $250,000 to $255,000.
The full list of changes will be posted on the IRS website in IRS News Release 2012-77.