2012 Employee Benefits Cost of Living Adjustments Announced

The Internal Revenue Service (IRS) released the Cost of Living Adjustments (COLAs) for dollar limitations on benefits and contributions under the Internal Revenue Code (Code) for 2012.  The 2012 COLAs are set forth in News Release IR-2011-103, which was published on October 20, 2011.  The applicable limitations are as follows:

COLA Increases for Dollar Limitations on Benefits and Contributions
2012 Retirement Plans COLAs  Code Section 2012 2011 2010 IRAs  IRA Contribution Limit – 219(b)(5)(A) 5,000 5,000 5,000 IRA Catch-Up Contributions – 219(b)(5)(B) 1,000 1,000 1,000 IRA AGI Deduction Phase-out Starting at Joint Return 92,000  90,000  89,000 Single or Head of Household 58,000  56,000  56,000 SEP  SEP Minimum Compensation – 408(k)(2)(C) 550 550 550 SEP Maximum Compensation – 408(k)(3)(C) 250,000 245,000 245,000 SIMPLE Plans  SIMPLE Maximum Contributions – 408(p)(2)(E) 11,500 11,500 11,500 Catch-up Contributions – 414(v)(2)(B)(ii) 2,500 2,500 2,500 401(k), 403(b), Profit-Sharing Plans, etc.  Annual Compensation – 401(a)(17)/404(l) 250,000 245,000 245,000 Elective Deferrals – 402(g)(1) 17,000 16,500 16,500 Catch-up Contributions – 414(v)(2)(B)(i) 5,500 5,500 5,500 Defined Contribution Limits – 415(c)(1)(A) 50,000 49,000 49,000 ESOP Limits – 409(o)(1)(C) 1,015,000200,000 985,000195,000 985,000195,000 Other  HCE Threshold – 414(q)(1)(B) 115,000 110,000 110,000 Defined Benefit Limits – 415(b)(1)(A) 200,000 195,000 195,000 Key Employee – 416(i)(1)(A)(i) 165,000 160,000 160,000 457 Elective Deferrals – 457(e)(15) 17,000 16,500 16,500 Control Employee – 1.61-21(f)(5)(i) 100,000 95,000 95,000 Control Employee – 1.61-21(f)(5)(iii) 205,000 195,000 195,000 Taxable Wage Base 110,100 106,800 106,800

For Help or More Information

If you need help reviewing, updating, administering or defending your fringe benefit or other employee benefit, compensation or human resources practices, please contact the author of this update, Cynthia Marcotte Stamer.

Recently selected for induction as a Fellow in the American College of Employee Benefit Council and for extensive work and accomplishments in the employee benefits and human resources area, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 24 years of work, advocacy, education and publications on employee benefit, human resources and related workforce, insurance and financial services, and health care matters. 

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary author of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to watch legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns. 

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the  Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

• Employers Considering Using New IRS Voluntary Worker Classification Settlement Program To Resolve Payroll Tax Risks Must Also Manage Other Legal Exposures
• Participant Notification Added To Required Procedures For Church Plan Determination Letter Requests
• HHS Credits Affordable Care Act Adult Dependent Child Coverage Rule With Getting 1 Million Young Adults Health Coverage
• 2010 Webcast Series on Federal Employer Employment of Persons With Disabilities Planned
• EBSA Plans To Include Health Care Reform Compliance In Health Plan Audits Beginning In FY 2012; Disputes OIG Criticism Of ACA Enforcement Efforts
• New Labor Department Video Tries To Educate Young Workers About Benefits & Benefit Rights
• Employer Assistance and Resource Network Offers Free Webinars For Employers During October In Honor of Disability Employment Awareness Month on Thursdays in October from 2:00 – 2:30 p.m. Eastern Time. Topics will include Employer Preparedness to Include Veterans with Disabilities
• HHS Projects Medicare Advantage Enrollment Will Rise As Premiums Decline In 2012; Plans Face Increased Regulation & Enforcement
• HHS Credits Health Reform For Getting Health Coverage For Added 1 Million Young Adults
• 4th Circuit Rejects Two Challenges To Affordable Care Act Constitutionality
• Stamer Named Fellow In American College of Employee Benefits Counsel
• ABA TIPS Section Appoints Cynthia Marcotte Stamer Vice Chair of Employee Benefits General Committee
• Affordable Care Act To Require Health Plans Cover Contraception & Other Women’s Health Procedures In 2012
• Company Executives, Plan Sponsors & Others May Face Personal Liability When Others Defraud Plans or Mismanage Employee Benefit Plan Responsibilities
• EEOC Finalizes Updates To Disability Regulations In Response to ADA Amendments Act: Employers Should Manage Risks  
• Employer Charged With Misclassifying & Underpaying Workers To Pay $754,578 FLSA Back pay Settlement
• HHS Imposes 1st HIPAA Privacy Civil Penalty of $4.3 Million
• NLRB Settlement Shows Care Necessary When Employers Use Social Networking & Other Policies Restricting Employee Communications
• Wage & Hour Law Settlements Highlight Rising Wage & Hour Risks of U.S. Employers
• OCR Requires Rhode Island DHS To Provide Translation, Other Services For Limited English, Other Language Impaired Accommodations

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources available at www.solutionslawpress.com. 

THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.