2013 Limits for Benefit Plans

Transcription

1 2013 Limits for Benefit Plans February 2013 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 report are official. Retirement Plans, published by IRS Annual Compensation: 1 Basic limit $255,000 $250,000 $245,000 $245,000 Certain governmental plans 380, , , ,000 Limits on Benefits and Contributions: Defined benefit plans, basic limit 2 205, , , ,000 Defined contribution plans, basic limit 2 51,000 50,000 49,000 49, (k) and 403(b) plans, elective deferrals 17,500 17,000 16,500 16, (b) plans, elective deferrals 17,500 17,000 16,500 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 Officer for Key Employee Definition 165, , , ,000 SIMPLE Plans: Elective Deferral Limit 12,000 11,500 11,500 11,500 Simplified Employee Pensions: Minimum compensation Maximum compensation 255, , , ,000 Tax Credit ESOPS: 5-year limit 1,035,000 1,015, , ,000 Additional 1-year limit 205, , , , (c) Excess Employee Compensation 1,066,000 1,039,000 1,014,000 1,000,000 Covered Compensation at age ,900 67,200 64,464 61,884 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 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. 5 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 Limits for Benefit Plans Page 1 of 5

2 Defined Benefit Plans, published by PBGC Maximum Guaranteed Benefit $57, $55, $54, $54, Single Employer Premium Fixed-rate, per participant Variable-rate (% of unfunded liability) 0.9% 0.9% 0.9% 0.9% Variable-rate (per participant maximum) $ Multiemployer Premium Social Security, published by SSA Payroll Taxes: Employer share / employee share 6 both 6.20% 6.20% / 4.20% 6.20% / 4.20% both 6.20% Wage base $113,700 $110,100 $106,800 $106,800 Earnings Test Thresholds: Years before normal retirement age 7 15,120 14,640 14,160 14,160 Year of normal retirement age 8 40,080 38,880 37,680 37,680 Cost-of-Living Adjustment, at end of prior year 1.7% 3.6% 0.0% 0.0% Maximum Annual Benefit, at age ,968 27,720 26,988 26,292 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): 4,768 4,624 4,517 4,586 Family Maximum bend points 150% of PIA up to: 1, % of excess PIA up to: 1,459 1,415 1,382 1, % of excess PIA up to (and 175% of excess over): 1,903 1,845 1,803 1,830 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 Additional tax rate, employee only % Inpatient deductible $1, $1, $1, $1, Daily coinsurance, days Daily coinsurance, days lifetime reserve Daily coinsurance, skilled nursing facility 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 1947 for the 10 months before the Social Security normal retirement age of 66 (i.e., November 2013). 9 For retirement at age 65, the Social Security benefit is reduced for early retirement. 10 On individual s wages and other compensation in excess of $200,000 (or, if married filing a joint return, $250,000) Limits for Benefit Plans Page 2 of 5

3 Medicare, published by Centers for Medicare & Medicaid Services (continued) Part B (supplementary medical insurance): Monthly premium 11 $ $99.90 $ $ Deductible Part D (standard drug insurance): Monthly premium Deductible Initial coverage limit (Medicare pays 75%) 2,970 2,930 2,840 2,830 Out-of-pocket threshold (Medicare pays 0%) 4,750 4,700 4,550 4,550 Catastrophic coverage (Medicare pays 95%) 6, , , , Control Employee Definition for Commuting Valuation, published by IRS Officer Compensation $100,000 $100,000 $95,000 $95,000 Employee Compensation 205, , , ,000 Dependent Care Assistance Plans Maximum $5,000 $5,000 $5,000 $5,000 Qualified Transportation Fringe Benefit, published by IRS Monthly Parking $245 $240 $230 $230 Monthly Transit Pass/Commuter Vehicle Adoption Exclusion and Credit, published by IRS Maximum for Exclusion and Credit, per child $12,970 $12,650 $13,360 $13,170 Phase-out Start for Credit , , , ,520 Health Savings Accounts, published by IRS Single Family Single Family Single Family Single Family Maximum contributions $3,250 $6,450 $3,100 $6,250 $3,050 $6,150 $3,050 $6,150 Minimum deductible 1,250 2,500 1,200 2,400 1,200 2,400 1,200 2,400 Maximum out-of-pocket 6,250 12,500 6,050 12,100 5,950 11,900 5,950 11,900 Catch-up contributions 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1, The income-related Part B premiums for 2013 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 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 2013 for taxpayers with modified adjusted gross income of $234,580 or more Limits for Benefit Plans Page 3 of 5

4 Medical Savings Accounts, published by IRS Contribution range Single $1, , $1, , $1, , $1, , Family 3, , , , , , , , Deductible range Single 2,150-3,200 2,100-3,150 2,050-3,050 2,000-3,000 Family 4,300-6,450 4,200-6,300 4,100-6,150 4,050-6,050 Maximum out-of-pocket Single 4,300 4,200 4,100 4,050 Family 7,850 7,650 7,500 7,400 Long Term Care Insurance Deductible Premiums, published by IRS Age 40 or less $360 $350 $340 $330 Age Age ,360 1,310 1,270 1,230 Age ,640 3,500 3,390 3,290 Older than 70 4,550 4,370 4,240 4,110 Federal Standard Deduction and Exemption, published by IRS Basic Standard Deduction: Married filing jointly $12,200 $11,900 $11,600 $11,400 Head of household 8,950 8,700 8,500 8,400 Single 6,100 5,950 5,800 5,700 Personal Exemption 3,900 3,800 3,700 3,650 Federal Income Tax Brackets, published by IRS Married filing jointly: Rate Tax Bracket Tax Bracket Tax Bracket Tax Bracket Head of household: Single: 10.0% $0 $0 $0 $0 15.0% 17,850 17,400 17,000 16, % 72,500 70,700 69,000 68, % 146, , , , % 223, , , , % 450, % % 12,750 12,400 12,150 11, % 48,600 47,350 46,250 45, % 125, , , , % 203, , , , % 425, % % 8,925 8,700 8,500 8, % 36,250 35,350 34,500 34, % 87,850 85,650 83,600 82, % 183, , , , % 400, Limits for Benefit Plans Page 4 of 5

5 About Aon Hewitt Aon Hewitt is the global leader in human resource 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 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 Page 5 of 5