2011 Limits for Benefit Plans Updated

Transcription

1 2011 Limits for Benefit Plans Updated Each year, the U.S. government adjusts the limits for pension plans, Social Security, Medicare, and other benefit programs to reflect price and wage inflation, and changes in the law. As a result, employee benefit plans must be adapted annually to accommodate the new limits. All of the numbers in this Alert are official. This update to our November 16, 2010 Alert reflects previously-unannounced agency numbers. Retirement Plans, published by IRS Annual Compensation: 1 Basic limit $245,000 $245,000 $245,000 $230,000 Certain governmental plans 360, , , ,000 Limits on Benefits and Contributions: Defined benefit plans, basic limit 2 195, , , ,000 Defined contribution plans, basic limit 2 49,000 49,000 49,000 46, (k) and 403(b) plans, elective deferrals 16,500 16,500 16,500 15, (b) plans, elective deferrals 16,500 16,500 16,500 15, compensation limit adjustment factor Catch-up Contributions: 401(k), 403(b), or governmental 457(b) plans 5,500 5,500 5,500 5,000 SIMPLE plans 2,500 2,500 2,500 2,500 Highly Compensated Definition 4 110, , , ,000 Officer for Key Employee Definition 160, , , ,000 SIMPLE Plans: Elective Deferral Limit 11,500 11,500 11,500 10,500 Simplified Employee Pensions: Minimum compensation Maximum compensation 245, , , ,000 1 Limit applies to plan year (or 12 consecutive-month period) beginning in indicated calendar year. 2 Limit applies to limitation year ending in indicated calendar year. 3 The adjustment factor of for 2011 applies for a participant who separated from service before January 1, For a participant who separated from service during 2010, the 2011 adjustment factor is Limit applies to compensation during the plan year beginning in indicated calendar year to determine highly compensated for following plan year. Aon Hewitt Alert January 3,

2 Retirement Plans (continued), published by IRS Tax Credit ESOPs: 5-year limit $985,000 $985,000 $985,000 $935,000 Additional 1-year limit 195, , , ,000 Covered Compensation at age ,464 61,884 59,268 56,484 Defined Benefit Plans, published by PBGC Maximum Guaranteed Benefit $54,000 $54,000 $54,000 $51,750 Single Employer Premium Fixed-rate, per participant Variable-rate (% of unfunded liability) 0.9% 0.9% 0.9% 0.9% Multiemployer Premium Social Security, published by SSA Payroll Taxes: Employer share / employee share 6.2% / 4.2% both 6.20% both 6.20% both 6.20% Wage base $106,800 $106,800 $106,800 $102,000 Earnings Test Thresholds: Years before normal retirement age 6 14,160 14,160 14,160 13,560 Year of normal retirement age 7 37,680 37,680 37,680 36,120 Cost-of-Living Adjustment, at end of prior year 0.0% 0.0% 5.8% 2.3% Maximum Annual Benefit, at age ,988 26,292 26,064 24,360 Primary Insurance Amount (PIA) bend points 90% of average indexed monthly earnings (AIME) up to: % of excess AIME up to (and 15% of excess over): 4,517 4,586 4,483 4,288 Family Maximum bend points 150% of PIA up to: % of excess PIA up to: 1,382 1,403 1,372 1, % of excess PIA up to (and 175% of excess over): 1,803 1,830 1,789 1,711 Average Covered Wages, for indexing wages , , Medicare, published by Centers for Medicare & Medicaid Services Part A (hospital insurance): Payroll tax rate, employee share 1.45% 1.45% 1.45% 1.45% Wage base unlimited unlimited unlimited unlimited Inpatient deductible $1, $1, $1, $1, Daily coinsurance, days Daily coinsurance, days lifetime reserve Daily coinsurance, skilled nursing facility Amount applies in indicated calendar year to individuals age 65 in that year. It does not include increases beyond age 65 for individuals with a Social Security normal retirement age greater than In 2011, the Social Security normal retirement age is age 66. The normal retirement age will gradually increase to age 67 in This earnings test applies in the months before a worker s Social Security normal retirement age in the year the worker attains that age. For example, the earnings test would apply to a worker born in November 1945 for the 10 months before the Social Security normal retirement age of 66 (i.e., November 2011). 8 For retirement at age 65, the Social Security benefit is reduced for early retirement. Aon Hewitt Alert January 3,

3 Medicare, published by Centers for Medicare & Medicaid Services (continued) Part B (supplementary medical insurance): Monthly premium 9 $ $ $96.40 $96.40 Deductible Part D (standard drug insurance): Monthly premium Deductible Initial coverage limit (Medicare pays 75%) 2,840 2,830 2,700 2,510 Out-of-pocket threshold (Medicare pays 0%) 4,550 4,550 4,350 4,050 Catastrophic coverage (Medicare pays 95%) 6, , , , Control Employee Definition for Commuting Valuation, published by IRS Officer Compensation $95,000 $95,000 $95,000 $90,000 Employee Compensation 195, , , ,000 Dependent Care Assistance Plans Maximum $5,000 $5,000 $5,000 $5,000 Qualified Transportation Fringe Benefit, published by IRS Monthly Parking $230 $230 $230 $220 Monthly Transit Pass/Commuter Vehicle Adoption Exclusion and Credit, published by IRS Maximum for Exclusion and Credit, per child $13,360 $12,170 $12,150 $11,650 Phase-out Start for Credit , , , ,730 Health Savings Accounts, published by IRS Single Family Single Family Single Family Single Family Maximum contributions $3,050 $6,150 $3,050 $6,150 $3,000 $5,950 $2,900 $5,800 Minimum deductible 1,200 2,400 1,200 2,400 1,150 2,300 1,100 2,200 Maximum out-of-pocket 5,950 11,900 5,950 11,900 5,800 11,600 5,600 11,200 Catch-up contributions 1,000 1,000 1,000 1,000 1,000 1, The income-related Part B premiums for 2011 will be $161.50, $230.70, $299.90, or $369.10, if an individual s modified adjusted gross income exceeds $85,000, $107,000, $160,000, or $214,000, respectively (or, if married filing a joint return, $170,000, $214,000, $320,000, or $428,000, respectively). The base premium and income-related amounts do not reflect the hold harmless limit (capping premiums at prior year levels for most individuals). 10 These figures are averages. The premiums vary depending upon the type of coverage and the private sector insurer sponsoring the Part D plan. 11 For months beginning after February 17, 2009 and before January 1, 2011, the monthly limit was increased to $230 from $ Completely phased out for taxpayers with modified adjusted gross income of $225,210 or more. Aon Hewitt Alert January 3,

4 Medical Savings Accounts, published by IRS Contribution range Single $1, , $1, , $1, , $1, , Family 3, , , , , , , , Deductible range Single $2,050-3,050 2,000-3,000 2,000-3,000 1,950-2,900 Family 4,100-6,150 4,050-6,050 4,000-6,050 3,850-5,800 Maximum out-of-pocket Single 4,100 4,050 4,000 3,850 Family 7,500 7,400 7,350 7,050 Long Term Care Insurance Deductible Premiums, published by IRS Age 40 or less $340 $330 $320 $310 Age Age ,270 1,230 1,190 1,150 Age ,390 3,290 3,180 3,080 Older than 70 4,240 4,110 3,980 3,850 Federal Standard Deduction and Exemption, published by IRS Basic Standard Deduction: Married filing jointly $11,600 $11,400 $11,400 $10,900 Head of household 8,500 8,400 8,350 8,000 Single 5,800 5,700 5,700 5,450 Personal Exemption 3,700 3,650 3,650 3,500 Federal Income Tax Brackets, published by IRS Married filing jointly: Rate Tax Bracket Tax Bracket Tax Bracket Tax Bracket 15.0% 17,000 16,750 16,700 16, % 69,000 68,000 67,900 65, % 139, , , , % 212, , , ,300 Head of household: 15.0% 12,150 11,950 11,950 11, % 46,250 45,550 45,500 43, % 119, , , , % 193, , , ,400 Single: 15.0% 8,500 8,375 8,350 8, % 34,500 34,000 33,950 32, % 83,600 82,400 82,250 78, % 174, , , ,550 Aon Hewitt Alert January 3,

5 About Aon Hewitt Aon Hewitt is the global leader in human capital consulting and outsourcing solutions. The Company partners with organizations to solve their most complex benefits, talent and related financial challenges, and improve business performance. Aon Hewitt designs, implements, communicates and administers a wide range of human capital, retirement, investment management, health care, compensation and talent management strategies. With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients and their employees. For more information on Aon Hewitt, please visit Join the HRevolution Aon Hewitt is writing a revolutionary chapter in the evolution of human resources. Learn more at aonhewitt.com. To subscribe to Alert, please send an to aon_hewitt_alert@aonhewitt.com with "subscribe" in the subject line. Copyright 2011 Aon Hewitt Inc. This document is intended for general information purposes only and should not be construed as advice or opinions on any specific facts or circumstances. The comments in this summary are based upon Aon Hewitt's preliminary analysis of publicly available information. The content of this document is made available on an "as is" basis, without warranty of any kind. Aon Hewitt disclaims any legal liability to any person or organization for loss or damage caused by or resulting from any reliance placed on that content. Aon Hewitt reserves all rights to the content of this document. Aon Hewitt Alert January 3,