I.R.S. Announces Year 2000 Retirement Plan Limits

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October 20, 1999: The I.R.S. announced today that the tax year 2000 dollar limit on the maximum permissible amount of elective contributions to a &#sect;401(k) plan will increase from $10,000 to $10,500. The I.R.S. also announced that the tax year 2000 limit on the maximum amount of annual compensation that may be taken into account on behalf of any participant under a qualified plan will increase from $160,000 to $170,000. The limitation on the maximum annual benefit under a defined benefit plan was increased from $130,000 to $135,000. The $30,000 limitation on allocations under a defined contribution plan remains unchanged. Also, as a result of a legislative change enacted several years ago, the overall limit on the benefits of an individual who is covered under both a defined benefit plan and a defined contribution plan is repealed for the plan year beginning in 2000. Depending on the language of a particular plan, this repeal could result in a sudden increase in the benefit of a person that has historically been impacted by the limit.

I.R.S. Announces Year 2000 Retirement Plan Limits

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