TOOLS AND TECHNIQUES OF EMPLOYEE BENEFIT AND RETIREMENT PLANNING 12 TH EDITION

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1 TOOLS AND TECHNIQUES OF EMPLOYEE BENEFIT AND RETIREMENT PLANNING 12 TH EDITION 2012 Supplement Chapter 1 pp. 4, In 2012 the contribution limit for a 401(k) participant is $17,000. Catch-up contributions remain at $5,500. pp. 6,9 In 2012 the contribution limit for a profit sharing plan is $50,000. p. 9 In 2012 the maximum benefit allowable in a defined benefit plan is $200,000. pp In 2012 the Traditional and Roth IRA contribution limits remain at $5,000. The SIMPLE IRA contribution limit remains at $11,500. p. 12 In 2012 catch-up contributions for SIMPLE IRAs, SIMPLE 401(k) plans and grandfathered SAR- SEPs remain at $2,500. Chapter 3 pp. 29, 33 In 2012 the maximum Social Security earnings base is $110,100. A person receives a quarter of coverage for every $1,130 of earnings up to a maximum of four. p. 33 The Average Wage Index in 2010 (used for those who reach age 62 in 2012) was $41, p. 34 In 2012 the bend points for determining an individual s Primary Insurance Amount are $767 and $4,624. The bend points for determining the Maximum Family Benefit are $980, $1,415, and $1,845. pp In 2012 the annual exempt amounts regarding the amount that may be earned without losing Social Security benefits rises to (1) $14,640 for individuals under Normal Retirement Age for the entire year; and (2) $38,880 for individuals who reach Normal Retirement Age in Chapter 4 p. 41 In 2012 the Part A deductible for the first 60 days of a benefit period is $1,156. For days 61 through 90 the co-insurance is $289. For the Lifetime Reserve Days, the co-insurance is $578. For care in a Skilled Nursing Facility, the co-insurance amount for days is $ per day. p. 43 In 2012 the Medicare Part B deductible is $140. p. 44 In 2012 the Medicare Part D Standard benefit is as follows: Drug Expense Patient Pays Medicare Pays First $ % Nothing $320-$2,930 25% 75% $2,930-$6, % Nothing Above $6, % 95% p. 44 In 2012 the poverty guidelines remain the same as p. 45 In 2012 the limit on out-of-pocket spending for Medigap Plan K is $4,660. The limit on out-ofpocket spending for Medigap Plan L is $2,330. Copyright 2012 The National Underwriter Company 1

2 p. 46 In 2012 the Medicare Part B basic monthly premium is $ The income-adjusted Part B premiums are as follows: Single Taxpayer Married Taxpayers Filing Jointly Total Premium Not greater than $85,000 Not greater than $170,000 $99.90 $85,000 - $107,000 $170,000 - $214, $107,000 - $160,000 $214,000 - $320, $160,000 - $214,000 $320,000 - $428, More than $214,000 More than $428, Married Taxpayers Filing Separately Total Premium Not greater than $85,000 $99.90 $85,000 - $129, More than $129, p. 46 For 2012 the average premium for Medicare Part D remains at $30. The late enrollment penalty will be about $0.32 per month. Chapter 5 p. 50 In 2012 the IRA contribution limit remains at $5,000 and the catch-up contribution limit remains at $1,000. p. 51 In 2012 the IRA Active Participant AGI phase-out ranges are as follows: Single Married Filing Jointly Married Filing Separately 58,000-68,000 92, , ,000 A non-active participant spouse may receive a full IRA deduction if joint income is less than $173,000. The non-active spouse may receive a partial deduction if joint income is between $173,000 and $183,000. Chapter 6 pp In 2012 the income limit range for a single individual is $110,000 to $125,000. For a married couple filing jointly the income limit range is $173,000 to $183,000. p. 58 In 2012 the maximum contribution allowed into a Roth IRA remains at $5,000. The catch-up contribution also remains at $1,000. In 2012 the applicable percentage regarding the Savers Credit is as follows: Copyright 2012 The National Underwriter Company 2

3 Chapter 7 p. 65 In 2012 the amount used to determine highly compensated employees rises to $115,000. pp In 2012 the covered compensation amounts are as follows: Figure 7.2 Year of Birth Year of Social Security Retirement 2012 COVERED COMPENSATION TABLE Year of Birth Year of Social Security Retirement 2012 Covered Compensation $ 4, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , $53, and later 2046 and later 110, , Covered Compensation Copyright 2012 The National Underwriter Company 3

4 2012 Rounded Covered Compensation Table 2012 Covered Year of Birth Compensation Rounded 1937 $39, , , , , , , , , , , , , , , , , , , , , , , and later 110,100 p. 68 In 2012 the Social Security Wage base is $110,100. p. 72 In 2012 the limit for defined benefit plans increases to $200,000. The limit for defined contribution plans increases to $50,000. The compensation limit increases to $250,000. The amount used to determine a key employee increases to $165,000. Chapter 8 p. 81 In 2012 the estate tax applicable exclusion amount rises to $5,120,000. Chapter 9 p. 89 In 2012 the top federal income tax rate is 35%. The estate tax rate is 35%. p. 90 In 2012 the dollar limit for PBGC insurance increases to $56,000. p. 91 In 2012 the applicable exclusion amount rises to $5,120,000. Chapter 10 p. 105 Revenue Procedure contains the latest requirements for documentation of determination letter requests. Copyright 2012 The National Underwriter Company 4

5 Chapter 13 p. 123 In 2012 the limit for annual additions to a defined contribution plan rises to $50,000. Chapter 14 pp In 2012 the maximum compensation taken into account rises to $250,000. pp In 2012 the limit for a defined benefit plan rises to $200,000. The PBGC premium remains at $35 per participant. p. 137 In 2012 the limit for annual additions to a defined contribution plan rises to $50,000. Chapter 15 p. 143 In 2012 the defined benefit limit rises to $200,000. Chapter 16 pp. 147, 149, 151 In 2012 the limit for annual additions to a defined contribution plan rises to $50,000. p. 149 In 2012 the maximum compensation taken into account rises to $250,000. Chapter 17 pp , 157 In 2012 the limit for annual additions to a defined contribution plan rises to $50,000. The maximum compensation taken into account rises to $250,000. p. 159 In 2012 the Social Security Wage base is $110,100. Chapter 18 p. 163 In 2012 the limit for annual additions to a defined contribution plan rises to $50,000. Chapter 19 p. 169 In 2012 the limit for elective deferrals rises to $17,000. p. 170 In 2012 the limit for annual additions to a defined contribution plan rises to $50,000. Chapter 20 pp , 177 In 2012 the limit for elective deferrals rises to $17,000. pp , 179 In 2012 the catch-up contribution limit for defined contribution plans remain at $5,500. pp. 175, 181 pp In 2012 the annual elective deferral limit for SIMPLE 401(k) plans remains at $11,500. The catch-up contribution limit for SIMPLE 401(k) plans remain at $2,500. In 2012 the amount used to determine highly compensated employees rises to $115,000. The limit for annual additions to a defined contribution plan rises to $50,000. p. 182 In 2012 the maximum compensation taken into account rises to $250,000. Copyright 2012 The National Underwriter Company 5

6 Chapter 21 pp , 189 In 2012 the limit for annual additions to a defined contribution plan rises to $50,000. Chapter 22 pp In 2012 the Traditional and Roth IRA contribution limits remain at $5,000. The limit for annual additions to a defined contribution plan rises to $50,000. The maximum compensation base rises to $250,000. The limit for elective deferrals rises to $17,000. Chapter 23 pp In 2012 the annual elective deferral limit for SIMPLE 401(k) plans remains at $11,500. Traditional and Roth IRA contribution limits remain at $5,000. p. 198 In 2012 the limit for elective deferrals rises to $17,000. The limit for SIMPLE IRA contributions remains at $11,500. The catch-up contribution limit for SIMPLE IRAs remains at $2,500. p. 199 In 2012 the applicable percentage regarding the Savers Credit is as follows: p. 200 In 2012 the limit for IRA contributions remains at $5,000. Chapter 24 pp In 2012 the limit for SEP contributions rises to $50,000. pp pp In 2012 the employee compensation needed to participate in a SEP plan remains at $550. The maximum compensation base rises to $250,000. In 2012 the limit for elective deferrals rises to $17,000. The catch-up contribution limit for defined contribution plans remain at $5,500. The limit for SIMPLE IRA contributions remains at $11,500. The catch-up contribution limit for SIMPLE IRAs remains at $2,500. p. 205 In 2012 the applicable percentage regarding the Savers Credit is as follows: Chapter 25 pp In 2012 the limit for elective deferrals rises to $17,000. The catch-up contribution limit for defined contribution plans remain at $5,500. The limit for annual additions to a defined contribution plan rises to $50,000. Copyright 2012 The National Underwriter Company 6

7 p. 210 In 2012 the maximum compensation base rises to $250,000. p. 212 In 2012 the applicable percentage regarding the Savers Credit is as follows: Chapter 26 p. 218 In 2012 the top individual income tax rate remains at 35%. p. 220 In 2012 the maximum compensation base rises to $250,000. p. 229 In 2012 the Social Security taxable wage base rises to $110,100. Chapter 27 pp In 2012 the limit for elective deferrals rises to $17,000. p. 248 In 2012 the catch-up contribution limit for defined contribution plans remain at $5,500. The limit for annual additions to a defined contribution plan rises to $50,000. p. 249 In 2012 the applicable percentage regarding the Savers Credit is as follows: Chapter 40 p. 313 In 2012 the Social Security Wage base rises to $110,100. Chapter 47 pp In 2012 the HAS contribution limit for an individual rises to $3,100 and for a family to $6,250. A high-deductible health plan has an individual deductible of $1,200 and a family deductible of $2,400. The maximum out-of-pocket costs for an individual rises to $6,050 and for a family rises to $12,100. p. 367 In 2012 for a Medical Savings Account the deductible range for individual coverage ranges from $2,100 to $3,150, with an out-of-pocket limitation of $4,200. For family coverage these numbers are $4,200, $6,300, and $7,650 respectively. Chapter 49 p. 380 The Department of Health and Human Services has determined that the CLASS Act is unworkable and implementation of the Act has been suspended. There are efforts in Congress to repeal the CLASS Act. Copyright 2012 The National Underwriter Company 7

8 pp In 2012 the per diem limitation for long-term care insurance benefits rises to $310 per day. The limitation on premiums paid for a long-term care policy are the following Attained Age Limit on Premium 40 or less $ through 50 $ through 60 $1, through 70 $3,500 Over 70 $4,370 Chapter 52 p. 396 In 2012 the qualified transportation fringe amount rises to $240. p. 398 In 2012 the amount used to determine highly compensated employees rises to $115,000. Chapter 53 p. 404 In 2012 the IRS mileage rate is 55.5 cents per mile for all business use. Chapter 55 p. 410 The provisions under Code section 222 expired without being renewed for Chapter 58 p. 420 In 2012 the mileage rate for moving rises to 23 cents per mile. Chapter 59 p. 424 In 2012 the maximum compensation taken into account rises to $250,000. Copyright 2012 The National Underwriter Company 8