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2010 Pension Plan Limits
Pension Plan Limits
2009
The Pension Plan Limits for Plan Years
Beginning in 2009 are:
401(k) PLANS
The limitation on elective deferrals
under section 402(g)(1) is $16,500. This
is a calendar year limit, not a plan
year limit. In addition, participants
who are age 50 or older in 2009 may
contribute an extra $5,500.
DEFINED CONTRIBUTION PLAN
LIMITATION
The limitation for defined contribution
plans (Profit Sharing / 401(k), Money
Purchase) under section 415(c)(1)(A)
increases to $49,000. This code section
limits the allocation of contribution
(salary deferral, match, employer
contribution) to a participant to the
lesser of 100% of compensation or
$49,000.
HIGHLY COMPENSATED EMPLOYEE
Compensation for purposes of defining
highly compensated employees under
section 414(q)(1)(B) increases to
$110,000. A highly compensated employee
is as follows:
1) More than 5% owner (and family
members under stock attribution rules)
2) Employee earning over $110,000 in the
prior plan year*
This means if you earn over $110,000
during the Plan Year beginning in 2009*
then you will be considered a highly
compensated employee for the plan year
beginning in 2010.
*and, if elected, are in the top 20% of
employees, ranked by compensation
COMPENSATION LIMIT
The annual compensation limit under
sections 401(a)(17) and 401(l) increases
to $245,000. This is the maximum
compensation amount which can be used
for contribution allocations and
discrimination testing.
MAXIMUM CONTRIBUTIONS
Employer profit sharing, employer match,
safe harbor and employer qualified
non-elective contributions cannot exceed
25% of eligible compensation. Salary
deferrals (401(k) contributions) are no
longer included in this calculation.
BONDING REQUIREMENT
Qualified plans must be bonded for at
least ten percent (10%) of the assets in
the retirement trust; it may not be for
less than $1,000 and need not be for
more than $500,000. Additional bonding
is required for "non-qualifying" assets.
DEFINED BENEFIT DOLLAR LIMIT
The dollar limitation on the annual
benefit for defined benefit plans under
Internal Revenue Code Section
415(b)(1)(A) increases to $195,000.
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