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.

    You may like these other stories...

    IRS audits less than 1 percent of big partnershipsAccording to an April 17 report from the Government Accountability Office (GAO), the IRS audits fewer than 1 percent of large business partnerships, Stephen Ohlemacher of the...
    Legislation coming out of Washington just might reduce homeowners' burden for disaster insurance. It's a topic very much on everyone's minds since the mudslide in Oso, Washington. The loss of human life was...
    Divorce is hard, and the IRS isn't going to make it any easier. The IRS generally says "no" to tax deductions that might ease the pain of divorce. In certain circumstances, however, you might be able to salvage...

    Upcoming CPE Webinars

    Apr 22
    Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
    Apr 24
    In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
    Apr 25
    This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
    Apr 30
    During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.