The Internal Revenue Service announced adjustments to the dollar limitations set for pension plans in the 2007 tax year.
For most of the limitations, the increase in the cost-of-living index met the statutory thresholds that trigger an adjustment.
Effective Jan. 1, 2007, the limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) is increased from $175,000, to $180,000. For participants who separated from service before that date, the limitation for defined benefit plans under Section 415(b)(1)(B) is computed by multiplying the participant's compensation limitation, as adjusted through 2006, by 1.0334.
The limitation for defined contribution plans under Section 415(c)(1)(A) is increased from $44,000 to $45,000.
Details on the specific dollar amounts for a variety of other plans is available at www.irs.gov/newsroom/article/0,,id=163616,00.html.
Section 415 of the Internal Revenue Code provides for dollar limitations on benefits and contributions under qualified retirement plans and requires the agency’s commissioner to annually adjust the limits for cost of living increases.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access