The Internal Revenue Service (IRS) announced cost of
living adjustments (COLAs) affecting dollar limitations for pension plans and
other retirement-related items for tax year 2013.
elective deferral (contribution) limit for employees who participate in 401(k),
403(b), most 457 plans and the federal government’s Thrift Savings Plan is
increased from $17,000 to $17,500. The catch-up contribution limit for
employees ages 50 and over who participate in 401(k), 403(b), most 457 plans
and the federal government’s Thrift Savings Plan remains unchanged at
415 of the Internal Revenue Code provides for dollar limitations on benefits
and contributions under qualified retirement plans. Section 415(d) requires
that the commissioner annually adjust these limits for cost of living
increases. The limitations that are adjusted by reference to Section
415(d) generally will change for 2013 because the increase in the
cost-of-living index met the statutory thresholds that trigger their
January 1, 2013, the limitation on the annual benefit under a defined benefit
plan under Section 415(b)(1)(A) is increased from $200,000 to $205,000. For a
participant who separated from service before January 1, 2013, the limitation
for defined benefit plans under Section 415(b)(1)(B) is computed by multiplying
the participant's compensation limitation, as adjusted through 2012, by
limitation for defined contribution plans under Section 415(c)(1)(A) is
increased in 2013 from $50,000 to $51,000.
annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C) and
408(k)(6)(D)(ii) is increased from $250,000 to $255,000.