The highly compensated employee figure — estimated by Hewitt to be $90,000 in 2002, up from $85,000 this year — is considered particularly key for plan sponsors.
The IRS has delayed issuing or confirming the 2002 indexed limits because of a technical problem in the Economic Growth &Tax Relief Reconciliation Act of 2001 (EGTRRA) regarding the indexing of dollar limits on certain retirement plans, such as SEPs and SIMPLE plans.
An official release isn’t expected from the IRS before the end of November.
The following limits were increased by EGTRRA so are not indexed for 2002 (compared with the 2001 figure):
- 401(k) annual contribution dollar limit: $11,000, up from $10,500
- Section 415 limit for defined benefit plans: $160,000, up from $140,000
- Section 415 limit for defined contribution plans: $40,000, up from $35,000
- Section 401(a)(17) compensation limit: $200,000, up from $170,000.
– Fred Schneyer firstname.lastname@example.org