November 2010

IRS Announces 2011 Limits for Retirement Plans

Posted Nov. 15, 2010

Dollar limitations on benefits and contributions for retirement plans remain unchanged.

On October 28, 2010, the IRS announced the 2011 cost-of-living adjustments applicable to dollar limitations for retirement plans and other items. The limits remain the same as they were in 2010. Retirement plans are subject to annually adjusted dollar limitations by the IRS for cost-of-living increases, and are normally determined based on inflation data provided by the Bureau of Labor Statistics' release of the Consumer Price Index. Effective January 1, 2011, the following limitations apply (comparison to previous years also shown):

401(k) Plan Limits	2010	2010	2009	2008	2007
401(k) Elective Deferrals	$16,500	$16,500	$16,500	$15,500	$15,500
Catch-Up Contribution Limit	$5,500	$5,500	$5,500	$5,000	$5,000
Annual Defined Contribution Limit	$49,000	$49,000	$49,000	$46,000	$45,000
Annual Compensation Limit	$245,000	$245,000	$245,000	$230,000	$225,000
Highly Compensated Employees	$110,000	$110,000	$110,000	$105,000	$100,000
Non 401(k) Related Limits
403(b) / 457 Elective Deferrals	$16,500	$16,500	$16,500	$15,500	$15,500
SIMPLE Employee Deferrals	$11,500	$11,500	$11,500	$10,500	$10,500
SIMPLE Catch-Up Deferral	$2,500	$2,500	$2,500	$2,500	$2,500
SEP Minimum Compensation	$550	$550	$550	$500	$500
SEP Annual Compensation Limit	$245,000	$245,000	$245,000	$230,000	$225,000
Defined Benefit Plan Limit	$195,000	$195,000	$195,000	$185,000	$180,000
Social Security Wage Base	$106,800	$106,800	$106,800	$102,000	$97,500

March 2010

President Signs HIRE Act; New Law Provides Hiring Incentives, Expensing Extension and More

Posted Mar. 18, 2010

On March 18, President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act. The President’s signature sets the effective date for numerous HIRE Act provisions with an effective date geared to the March 18, 2010, date of enactment. Significant provisions of the new law include:

Payroll tax holiday and up-to-$1,000 credit for employers who hire unemployed workers. To help stimulate the hiring of workers by the private sector, the new law exempts any private-sector employer that hires a worker who had been unemployed for at least 60 days from having to pay the employer’s 6.2% share of the Social Security payroll tax on that employee for the remainder of 2010. A company could save a maximum of $6,621 if it hired an unemployed worker and paid that worker at least $106,800 — the maximum amount of wages subject to Social Security taxes—by the end of the year. As an additional incentive, for any qualifying worker hired under this initiative that the employer keeps on payroll for a continuous 52 weeks, the employer is eligible for an additional non-refundable tax credit of up to $1,000 after the 52-week threshold is reached, to be taken on their 2011 tax return. In order to be eligible, the employee’s pay in the second 26-week period must be at least 80% of the pay in the first 26-week period.

Click here to download this important LBA Alert to learn more.

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June 2009

How Soon Must An Employer Transmit Salary Deferrals To The 401(k) Plan After They Have Been Withheld From Employees’ Pay?

Posted June 8, 2009

When auditing a 401(k) plan, the DOL reviews the employer’s deposit pattern. The regulations provide a seven business day safe harbor for deposit of employee contributions to the trust for small plans (i.e., plans with fewer than 100 participants). In short, employee contributions are deposited on time when deposited to the trust within seven business days after the payroll period.

Click here to download this important LBA Alert to learn more.

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April 2008

Company 401(k) Plan Sponsors Alert

Posted April 4, 2008

Foreclosures are up, home prices are down. Many borrowers are looking to their company 401(k) plans as a resource to cover financial shortfalls. As the plan sponsor, you will need to make sure you are diligent in documenting the hardship process. Click here to download our most recent Alert related to the administration of hardship withdrawals.

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October 2007

IRS Announces 2008 Limits

Posted October 30th, 2007

On October 18, 2007, the IRS announced the 2008 cost-of-living adjustments applicable to dollar limitations for retirement plans and other items.

Retirement plans are subject to annually adjusted dollar limitations by the IRS for cost-of-living increases, and are normally determined based on inflation data provided by the Bureau of Labor Statistics’ release of the Consumer Price Index. Many of the retirement plan limitations will change for Tax Year 2008. Click here to download the limits.

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October 2007

New Regulations

Posted October 4th, 2007

Final regulations recently released by the IRS provide the first comprehensive guidance on 403(b) tax-sheltered retirement arrangements in 43 years. Employers that sponsor 403(b) tax-sheltered retirement arrangements will have to address a number of compliance issues as the result of these comprehensive new regulations. Click here to download the details.