Pension Plan Dollar Limits for 2011

From our partners at Principal Financial:

The contributions and benefits under qualified retirement plans are subject to certain annual limits. Most of the annual limits are subject to an annual cost-of-living increase based on an increase in the Consumer Price Index (CPI) for the quarter ending September 30. Since the cost-of-living index for the quarter ending September 30, 2010 is less than the 2008 peak (the quarter ending September 30, 2008), the pension plan dollar limits will not change from 2010 to 2011.
Here are the pension dollar limits for 2011:
Limit
Compensation Limit – $245,000
Defined Contribution §415 Limit – $49,000
Defined Benefit §415 Limit – $195,000
Key Employee Officer – $160,000
Highly Compensated Employee – $110,000
Governmental Plan Compensation Limit – $360,000
ESOP §409(o) Limits – $985,000/$195,000
The elective deferral and catch-up contribution limits for 2011:
Limit
401(k), 403(b), 557(b) Plan Deferral Limits – $16,500
401(k), 403(b), governmental 457(b) Catch-up Limits – $5,500
Simple Plan Deferral Limit – $11,500
Simple Plan Catch-up Limit – $2,500

IRA Limits

The limit on contributions to a traditional or Roth IRA will not increase in 2011 and will remain at $5,000. The limit that applies to IRA catch-up contributions (contributions for individuals age 50 and over) remains at $1,000.

Social Security Changes

The Social Security Administration announced that the taxable wage base (TWB) for 2011 will not increase from the 2010 amount of $106,800. Workers pay Social Security tax on wages up to the TWB. Also, som retirement plan formulas are integrated with Social Security. These plans often use the TWB when allocating contributions or calculating benefits.