IRS Announces 2001 Pension Plan Limitations

The IRS has announced its annual cost-of-living adjustments with regard to dollar limitations for pension plans for the year 2001.

These new pension plan adjustments are subject to change should Congress enact legislation that would affect these amounts, and such information will be reported here as soon as it is available.

For now, the new limitations, which are effective as of January 1, 2001, are as follows:

  • The annual benefit under a section 415(b)(a)(A) defined benefit plan is $140,000, up from $135,000.

  • The annual limitation for section 415(c)(1)(A) defined contribution plans is $35,000, up from $30,000.

  • The dollar amount for determining the maximum account balance in an employee stock ownership olan with a 5-year distribution period is increased to $780,000, up from $755,000. The dollar amount used to determine the lengthening of the 5-year distribution period is $155,000, up from $150,000.

  • The annual compensation limitation for eligible participants in certain governmental plans that allow cost-of-living adjustments is $285,000, up from $275,000.

  • The limitation for section 408(p)(2)(A) simple retirement accounts is $6,500, up from $6,000.

  • The limitation on deferrals for deferred compensation plans of state and local governments and tax-exempt organizations, as defined in section 457(b)(2) and (c)(1) is $8,500, up from $8,000.

  • The compensation amount under section 1.61-21(f)(5)(iii) is $155,000, up from $150,000.
  • Other pension plan limitations remain unchanged from their 2000 limitations. This includes limitations for elective deferrals to section 401(k) plans, the federal government's Thrift Savings Plan, and IRA accounts.

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