The Internal Revenue Service has announced cost-of-living increases for various retirement plan limits under the Internal Revenue Code (the "Code") for 2001. There are some significant increases from the limits in place for 2000.
Qualified Plan Limits On Benefits And Contributions
The maximum annual benefit payable at a participant's Social Security retirement age under a qualified defined benefit plan in 2001 has increased from $135,000 to $140,000. The dollar limit on "annual additions" (basically contributions and forfeitures) on behalf of a participant to a qualified defined contribution plan will increase to $35,000 in 2001; this limit had previously been set at $30,000 since 1983.
Salary Deferrals Under Section 401(k) Plans And 403(b) Annuity Plans
