Pension Plan Limits For Tax Year 2001
The Internal Revenue Service has announced cost-of-living adjustments applicable to dollar limitations for pension plans and other items for Tax Year 2001.
Effective January 1, 2001, the limitation on the annual benefit under a defined benefit plan under section 415(b)(1)(A) is increased from $135,000 to $140,000. For participants who separated from service before January 1, 2001, the limitation for defined benefit plans under section 415(b)(1)(B) is computed by multiplying the participant's compensation limitation, as adjusted through 2000, by 1.0351.
The limitation for defined contribution plans under section 415(c)(1)(A) is increased from $30,000 to $35,000.
The limitation under section 402(g)(1) on the exclusion for elective deferrals described in section 402(g)(3) remains unchanged at $10,500. This limitation affects elective deferrals to § 401(k) plans and to the Federal government’s Thrift Savings Plan, among other plans.
The dollar amount under section 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a 5-year distribution period is increased from $755,000 to $780,000, while the dollar amount used to determine the lengthening of the 5-year distribution period is increased from $150,000 to $155,000.
SUMMARY
| 401(k) Elective
Deferrals |
$10,500 |
| Annual Defined
Benefit Limit |
$140,000 |
| Annual Defined
Contribution Limit |
$35,000 |
| Annual Compensation
Limit |
$170,000 |
| Grandfathered
Compensation Rule for Government Plans |
$285,000 |
| Deferrals for
Government Plans |
$8,500 |
| Highly Compensated
Employees |
($80,000
indexed) $85,000 |
| SIMPLE Plan Employee
Deferrals |
$6,500 |
| SEP Coverage |
$450 |
| SEP Compensation
Amount |
$170,000 |
| Tax Credit ESOP
Maximum Balance |
$780,000 |
| Amount for
Lengthening of 5-Year ESOP Period |
$155,000 |
Click here for the full IRS Press Release that contains specific data (PDF File).
