If you were hoping to be able to sock away more money into your 401(K) Plan in 2011 than you did in 2011, fuggedaboutit! The maximum elective deferrals for 2011 remains the same as it was for 2009 and 2010 — $16,500. The catch-up contribution limitation for those who are at least age 50 during 2011 is also unchanged at $5,500. The annual limit on compensation remains at $245,000, the defined contribution limit on contributions remains at $49,000 and the maximum benefit payable from a defined benefit remains at the lesser of 100% of compensation or $195,000.
Congress established the method by which the IRS determines the inflation adjusted annual benefit plan limitations. However, it seems like bad public policy to limit amounts that will be payable to employees upon retirement by the current cost of living increases, especially when the stock market is performing sluggishly.
Look for the complete listing of the adjustments to the benefit limitations when we publish our 2011 Benefits Update Card, a link to which will be posted on this blog.