What is a "Qualified" Retirement Plan?

A “qualified” retirement plan is one that is described in Section 401(a) of the Internal Revenue Code. Simply, if a plan is not subject to the rules of Section 401(a), it is not a qualified plan. Common types of qualified plans are defined benefit plans, money purchase plans and profit sharing (including 401(k)) plans.

Generally speaking, if a plan is qualified, contributions are not subject to tax until the money is withdrawn from the plan and any investment earnings from those contributions are tax-deferred as long as they remain in the plan. Furthermore, any contributions made by the Employer are tax deductible.

What is a Summary Plan Description?

A Summary Plan Description is a just that, a summary of the provisions of a plan. This document is prepared for distribution to all employees eligible to participate in the plan. It will include the major provisions of the plan, including but not limited to, vesting schedules for employer contributions, distribution rules, loan provisions (if applicable) and other rights and benefits under the plan.

What are the Pension Plan Limitations for the current plan year and recent prior years?

 

2010

2011

2012

2013

Plan Limitations:        

401(k) Elective Deferral Limitation
(salary deferral):

$16,500

$16,500

$17,000

$17,500

Catch-up 401(k) Contribution Limitation
for participants over 50 yrs old:

$5,500

$5,500

$5,500

$5,500

Annual Defined Contribution (DC)
Limitation (exclusive of catch-up):

$49,000

$49,000

$50,000

$51,000

Annual Limitation on Considered
Compensation:

$245,000

$245,000

$250,000

$255,000

Highly Compensated Employee
Threshold for non-owners:

$110,000

$110,000

$115,000

$115,000

Other Limitations:

 

 

 

 


Social Security Wage Base

$106,800

$106,800

$110,100

$113,700

403(b)/457 Elective Deferrals

$16,500

$16,500

$17,000

$17,500

SIMPLE Employee Deferrals

$11,500

$11,500

$11,500

$12,000

SIMPLE Catch-Up Deferral

$2,500

$2,500

$2,500

$2,500


 

2014

2015

2016

2017

Plan Limitations:        

401(k) Elective Deferral Limitation
(salary deferral):

$17,500

$18,000

$18,000

$18,000

Catch-up 401(k) Contribution Limitation
for participants over 50 yrs old:

$5,500

$6,000

$6,000

$6,000

Annual Defined Contribution (DC)
Limitation (exclusive of catch-up):

$52,000

$53,000

$53,000

$54,000

Annual Limitation on Considered
Compensation:

$260,000

$265,000

$265,000

$270,000

Highly Compensated Employee
Threshold for non-owners:

$115,000

$120,000

$120,000

$120,000

Other Limitations:

       


Social Security Wage Base

$117,000

$118,500

$118,500

$127,200

403(b)/457 Elective Deferrals

$17,500

$18,000

$18,000

$18,000

SIMPLE Employee Deferrals

$12,000

$12,500

$12,500

$12,500

SIMPLE Catch-Up Deferral

$2,500

$3,000

$3,000

$3,000


If you would like more information on 401(k) investing, please visit the following link to the NASD website:

http://www.nasd.com/Investor/Smart/401k/index.html
Smart 401(k) Investing by the NASD