Client Alert
Year 2008 Retirement Plan Cost-of-Living Adjustments
October 18, 2007
The Internal Revenue Service has announced the cost-of-living adjustments applicable to qualified retirement plans for the year 2008, and the Social Security Administration has announced its own cost-of-living adjustments for 2008. Note that the limits under Code Sections 402(g)(1) (the maximum elective deferral) and 414(v) (the maximum catch-up contribution) are unchanged for 2008. The following is a chart comparing the commonly used 2007 and 2008 year limits:
|
Type of Limit |
2007 |
2008 |
|
IRC Section 401(a)(17) – Qualified Plans –
Maximum Compensation Limit Per Person |
$225,000 |
$230,000 |
|
IRC Section 402(g)(1) – 401(k) Plans –
Maximum Elective Deferral Per Person Per Year |
$15,500 |
$15,500 |
|
IRC Section 414(q)(1)(B) – Qualified Plans –
Definition of Highly Compensated Employee |
$100,000 |
$105,000 |
|
IRC Section 414(v) – 401(k) Plans –
Maximum Catch-Up Contribution Per Person For
Persons Age 50 and Over |
$5,000 |
$5,000 |
|
IRC Section 415(b) – Defined Benefit Plans –
Maximum Annual Benefit Payable Per Person |
$180,000 |
$185,000 |
|
IRC Section 415(c) – Defined Contribution Plans –
Maximum Annual Contribution Per Person |
$45,000 |
$46,000 |
|
IRC Section 416(i)(1)(A)(i) – Qualified Plans –
Dollar Limit Used In Definition of Officer Key Employee for
Purposes of Top-Heavy Testing |
$145,000 |
$150,000 |
|
Social Security Taxable Wage Base |
$97,500 |
$102,000 |
For Additional Information
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