Pension Plan Limits For The Tax Year 2003

On October 18, 2002, the IRS announced (Release No: IR-2002-111) the retirement plan limits that are effective on January 1, 2003. Many of the pension plan limitations will not change for 2003. For most of the limitations, the increase in the cost-of-living index fell below the statutory thresholds that would otherwise trigger their adjustment. However, several of these limitations, set by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), are scheduled to increase at the beginning of 2003.

401K RELATED LIMITS
401k Elective Deferrals  $12,000
Annual Defined Contribution Limit $40,000*
Annual Compensation Limit $200,000*
Catch-Up Contribution Limit $2,000
Highly Compensated Employees  $90,000*
 
NON 401K RELATED LIMITS
403(b)/457 Elective Deferrals  $12,000
SIMPLE Employee Deferrals $8,000
SIMPLE Catch-Up Deferral $1,000
SEP Minimum Compensation $450*
SEP Annual Compensation Limit $200,000*
Social Security Wage Base $87,000

* Unchanged from 2002.

IRS announcement #2002-111 can located at http://benefitslink.com/IRS/ir2002-111.pdf.

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TAX OR INVESTMENT ADVICE.