Archive
By Staff Report
Oct. 17, 2008
The maximum contribution that can be made to 401(k) and other defined-contribution plans will increase next year, and the maximum benefit that can be funded through defined-benefit plans also will rise in 2009, the Internal Revenue Service announced Thursday, October 16.
The maximum annual contribution an employee can make through salary reduction to a 401(k) plan will rise to $16,500 from $15,500, while the maximum annual catch-up contribution that employees 50 and older can make to 401(k) and certain other defined-contribution plans will rise to $5,500 from $5,000.
In addition, the maximum annual total contribution, including employer contributions, to defined-contribution plans will rise to $49,000 per participant from $46,000.
The maximum annual benefit that can be funded through a defined-benefit plan will increase to $195,000 from $185,000, and the amount of employee compensation that can be considered in calculating pension benefits and contributions to defined-contribution plans will rise to $245,000 from $230,000.
The definition of a highly compensated employee for 401(k) plan nondiscrimination testing purposes will rise in 2009 to one earning $110,000 a year from $105,000.
The 2009 limits are determined by a methodology set by federal law and reflect increases in the cost of living.
Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
Workforce Management’s online news feed is now available via Twitter.
Schedule, engage, and pay your staff in one system with Workforce.com.
Compliance
Minimum Wage by State (2024)federal law, minimum wage, pay rates, state law, wage law compliance
Staffing Management
4 proven steps for tackling employee absenteeismabsence management, Employee scheduling software, predictive scheduling, shift bid, shift swapping
Time and Attendance
8 proven ways to reduce overtime & labor costs (2023)labor costs, overtime, scheduling, time tracking, work hours