2014 Limits for Benefit Plans

Transcription

1 2014 Limits for Benefit Plans November 2013 Each year, the U.S. government adjusts the limits for retirement 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 report are official unless otherwise indicated. Retirement Plans Published by IRS Annual compensation: 1 Basic limit $ 260,000 $ 255,000 $ 250,000 $ 245,000 Certain governmental plans $ 385,000 $ 380,000 $ 375,000 $ 360,000 Limits on benefits and contributions: Defined benefit plans, basic limit 2 $ 210,000 $ 205,000 $ 200,000 $ 195,000 Defined contribution plans, basic limit 2 $ 52,000 $ 51,000 $ 50,000 $ 49, (k) and 403(b) plans, elective deferrals $ 17,500 $ 17,500 $ 17,000 $ 16, (b) plans, elective deferrals $ 17,500 $ 17,500 $ 17,000 $ 16, compensation limit adjustment factor Catch-up contributions: 401(k), 403(b), or governmental 457(b) plans $ 5,500 $ 5,500 $ 5,500 $ 5,500 SIMPLE plans $ 2,500 $ 2,500 $ 2,500 $ 2,500 Highly Compensated definition 4 $ 115,000 $ 115,000 $ 115,000 $ 110,000 Officer for Key Employee definition $ 170,000 $ 165,000 $ 165,000 $ 160,000 SIMPLE plans: elective deferral limit $ 12,000 $ 12,000 $ 11,500 $ 11,500 Simplified employee pensions: Minimum compensation $ 550 $ 550 $ 550 $ 550 Maximum compensation $ 260,000 $ 255,000 $ 250,000 $ 245,000 Tax credit ESOPS: 5-year limit $ 1,050,000 $ 1,035,000 $ 1,015,000 $ 985,000 Additional 1-year limit $ 210,000 $ 205,000 $ 200,000 $ 195, (c) excess employee compensation $ 1,084,000 $ 1,066,000 $ 1,039,000 $ 1,014,000 Covered compensation at age 65 5 $ 72,600 $ 69,900 $ 67,200 $ 64,464 _ Limit applies to plan year (or 12 consecutive-month period) beginning in indicated calendar year. Limit applies to limitation year ending in indicated calendar year. The adjustment factor of for 2011 and for 2012 apply for a participant who separated from service before January 1, For a participant who separated from service during 2010 or 2011, the 2011 adjustment factor is and the 2012 adjustment factor is Limit applies to compensation during the plan year beginning in indicated calendar year to determine highly compensated for following plan year. 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 65. As of the date this is published, the 2014 amount was not yet official Limits for Benefit Plans, November

2 Defined Benefit Plans Published by PBGC Maximum guaranteed benefit $ 59, $ 57, $ 55, $ 54, Single employer premium: Fixed-rate, per participant $ 49 $ 42 $ 35 $ 35 Variable-rate (% of unfunded liability) 1.4% 0.9% 0.9% 0.9% Variable-rate (per participant maximum) $ 412 $ 400 Multiemployer premium $ 12 $ 12 $ 9 $ 9 Social Security Published by SSA Payroll taxes: Employer share/employee share 6 both 6.20% both 6.20% 6.20%/4.20% 6.20%/4.20% Wage base $ 117,000 $ 113,700 $ 110,100 $ 106,800 Earnings test thresholds: Years before normal retirement age 7 $ 15,480 $ 15,120 $ 14,640 $ 14,160 Year of normal retirement age 8 $ 41,400 $ 40,080 $ 38,880 $ 37,680 Cost-of-living adjustment, at end of prior year 1.5% 1.7% 3.6% 0.0% Maximum annual benefit, at age 65 9 $ 29,172 $ 28,968 $ 27,720 $ 26,988 Primary Insurance Amount (PIA) bend points : 90% of average indexed monthly earnings (AIME) up to: $ 816 $ 791 $ 767 $ % of excess AIME up to (and 15% of excess over): $ 4,917 $ 4,768 $ 4,624 $ 4,517 Family maximum bend points : 150% of PIA up to: $ 1,042 $ 1,011 $ 980 $ % of excess PIA up to: $ 1,505 $ 1,459 $ 1,415 $ 1, % of excess PIA up to (and 175% of excess over): $ 1,962 $ 1,903 $ 1,845 $ 1,803 Average covered wages, for indexing wages $ 44, $ 42, The reduction in the employee share to 4.2% was extended through February 29, 2012 by the Temporary Payroll Tax Cut Continuation Act of 2011 and further extended through the end of 2012 by the Middle Class Tax Relief and Job Creation Act of In 2009 through 2020, 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 1948 for the 10 months before the Social Security normal retirement age of 66 (i.e., November 2014). For retirement at age 65, the Social Security benefit is reduced for early retirement Limits for Benefit Plans, November

3 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 Additional tax rate, employee only % 0.9% Inpatient deductible $ 1, $ 1, $ 1, $ 1, Daily coinsurance, days $ $ $ $ Daily coinsurance, days lifetime reserve $ $ $ $ Daily coinsurance, skilled nursing facility $ $ $ $ Part B (supplementary medical insurance): Monthly premium 11 $ $ $ $ Deductible $ $ $ $ Part D (standard drug insurance): Monthly premium 12 $ 31 $ 30 $ 30 $ 30 Deductible $ 310 $ 325 $ 320 $ 310 Initial coverage limit (Medicare pays 75%) $ 2,850 $ 2,970 $ 2,930 $ 2,840 Out-of-pocket threshold (Medicare pays 0%) $ 4,550 $ 4,750 $ 4,700 $ 4,550 Catastrophic coverage (Medicare pays 95%) $ 6, $ 6, $ 6, $ 6, Health Savings Accounts Published by IRS Single Family Single Family Single Family Single Family Maximum contributions $ 3,300 $ 6,550 $ 3,250 $ 6,450 $ 3,100 $ 6,250 $ 3,050 $ 6,150 Minimum deductible $ 1,250 $ 2,500 $ 1,250 $ 2,500 $ 1,200 $ 2,400 $ 1,200 $ 2,400 Maximum out-of-pocket 13 $ 6,350 $ 12,700 $ 6,250 $ 12,500 $ 6,050 $ 12,100 $ 5,950 $ 11,900 Catch-up contributions $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 Medical Savings Accounts Published by IRS Contribution Single $ 1, $2, $ 1, $2, $ 1, $2, $ 1, $1, range Family $ 3, $4, $ 3, $4, $ 3, $4, $ 3, $4, Deductible Single $ 2,200-$3,250 $ 2,150-$3,200 $ 2,100-$3,150 $ 2,050-$3,050 range Family $ 4,350-$6,550 $ 4,300-$6,450 $ 4,200-$6,300 $ 4,100-$6,150 Maximum Single $ 4,350 $ 4,300 $ 4,200 $ 4,100 Out-of-pocket Family $ 8,000 $ 7,850 $ 7,650 $ 7, On individual s wages and other compensation in excess of $200,000 (or, if married filing a joint return, $250,000). 11 The income-related Part B premiums for 2014 will be $146.90, $209.80, $272.70, or $335.70, 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). 12 These figures are averages. The premiums vary depending upon the type of coverage and the private sector insurer sponsoring the Part D plan. 13 Starting in 2014, the maximum out-of-pocket applies to all plans, not just HSA-eligible, High Deductible Health Plans Limits for Benefit Plans, November

4 Long-Term Care Insurance Deductible Premiums Published by IRS Age 40 or less $ 370 $ 360 $ 350 $ 340 Age $ 700 $ 680 $ 660 $ 640 Age $ 1,400 $ 1,360 $ 1,310 $ 1,270 Age $ 3,720 $ 3,640 $ 3,500 $ 3,390 Older than 70 $ 4,660 $ 4,550 $ 4,370 $ 4,240 Control Employee Definition for Commuting Valuation Published by IRS Officer compensation $ 105,000 $ 100,000 $ 100,000 $ 95,000 Employee compensation $ 210,000 $ 205,000 $ 205,000 $ 195,000 Dependent Care Assistance Plans Maximum $ 5,000 $ 5,000 $ 5,000 $ 5,000 Qualified Transportation Fringe Benefits Published by IRS Monthly parking $ 250 $ 245 $ 240 $ 230 Monthly transit pass/commuter vehicle 14 $ 130 $ 245 $ 240 $ 230 Adoption Exclusion and Credit Published by IRS Maximum for exclusion and credit, per child $ 13,190 $ 12,970 $ 12,650 $ 13,360 Phase-out start for credit 15 $ 197,880 $ 194,580 $ 189,710 $ 185,210 Federal Standard Deduction and Exemption Published by IRS Basic standard deduction: Married filing jointly $ 12,400 $ 12,200 $ 11,900 $ 11,600 Head of household $ 9,100 $ 8,950 $ 8,700 $ 8,500 Single $ 6,200 $ 6,100 $ 5,950 $ 5,800 Personal exemption $ 3,950 $ 3,900 $ 3,800 $ 3, For months beginning after February 17, 2009 and before January 1, 2012, the monthly limit was increased to $230 from $120. The American Taxpayer Relief Act of 2012 increased the amount from $ to $ retroactively to January 1, Completely phased out in 2014 for taxpayers with modified adjusted gross income of $237,880 or more Limits for Benefit Plans, November

5 Federal Income Tax Brackets Published by IRS Married filing jointly: Rate Tax Bracket Tax Bracket Tax Bracket Tax Bracket income in excess of amounts 15.0% $ 18,150 $ 17,850 $ 17,400 $ 17, % $ 73,800 $ 72,500 $ 70,700 $ 69, % $ 148,850 $ 146,400 $ 142,700 $ 139, % $ 226,850 $ 223,050 $ 217,450 $ 212, % $ 457,600 $ 450,000 Head of household: income in excess of amounts 15.0% $ 12,950 $ 12,750 $ 12,400 $ 12, % $ 49,400 $ 48,600 $ 47,350 $ 46, % $ 127,550 $ 125,450 $ 122,300 $ 119, % $ 206,600 $ 203,150 $ 198,050 $ 193, % $ 432,200 $ 425,000 Single: income in excess of amounts 15.0% $ 9,075 $ 8,925 $ 8,700 $ 8, % $ 36,900 $ 36,250 $ 35,350 $ 34, % $ 89,350 $ 87,850 $ 85,650 $ 83, % $ 186,350 $ 183,250 $ 178,650 $ 174, % $ 406,750 $ 400,000 About Aon Hewitt Aon Hewitt empowers organizations and individuals to secure a better future through innovative talent, retirement and health solutions. We advise, design and execute a wide range of solutions that enable clients to cultivate talent to drive organizational and personal performance and growth, navigate retirement risk while providing new levels of financial security, and redefine health solutions for greater choice, affordability and wellness. Aon Hewitt is the global leader in human resource solutions, with over 30,000 professionals in 90 countries serving more than 20,000 clients worldwide. For more information on Aon Hewitt, please visit Aon plc 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 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. 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. Hewitt reserves all rights to the content of this document Limits for Benefit Plans, November