For the first time in three years, the IRS has raised the annual maximum for pension salary reduction in 2012:
Pension Salary Reduction Annual Maximum
414(v) Age 50 and
|2009, 2010 & 2011||$16,500||$5,500||$22,000|
If it is your intent to reach the 2011 maximum and are not already set up to do so, please complete a Salary Reduction Agreement (below) and return it to Human Resources by December 1, 2011. If you are changing your reduction in January, please complete and return the Salary Reduction Agreement by December 22, 2011.
The 2012 maximums for 12 monthly and 26 bi-weekly pay periods are:
|Under 50||50 and Over (Age as of 12/31/2012)|
|Bi-weekly||$ 673.07||$ 865.38|
Employees using the Age 50 “catch-up” provision need to check the applicable box and indicate their date of birth.
Employees with over 15 years of service may contribute additional “catch-up” amounts under the 15-Year Rule. If you have been advised that you cannot use the 15-Year Rule due to high historic contributions, that restriction still applies. I find that very few employees who want to maximize qualify under this Rule, as it can only be used by employees whose average annual salary reduction is under $5,000.
Please call or e-mail Marty Mastascusa from Human Resources if you have any questions: