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Compliance August 18, 2004
Mercer Releases Projected 2005 IRS Figures
August 18, 2004 (PLANSPONSOR.com) - Although the
Internal Revenue Service (IRS) figures have yet to be
released, Mercer Human Resources Consulting has issued
estimates for qualified retirement plans for the year
2005.
Reported by PS
Using the cost-of living adjustments methods described in the Internal Revenue Code, the Consumer Price Index Unadjusted (CPI-U) for July 2004, and projected CPI-U figures for August, Mercer projects the following key estimates:
- Elective Deferrals for 401(k), 403(b) and 457 plans will increase from $13,000 to $14,000.
- The annual benefit limit will be $170,000 (an increase of $5,000); the annual contribution limit will be $42,000 (an increase of $1,000); the annual compensation limit will be $210,000 (an increase of $5,000).
- The Highly Compensated Threshold will increase $5,000 to $95,000.
- The SIMPLE Plan contribution limit will be $10,000, up $1,000 from a year ago.
- The SEP coverage stays at $450; SEP compensation limit will increase $5,000 to $210,000.
- The Top-Heavy Plan Key Employee Compensation will increase to $135,000, up $5,000.
- Catch-Up Contributions will increase $1,000 to $4,000.
- SIMPLE Plan Catch-Up Contributions will increase $500 to $2,000.
Final values will depend on the CPI-U values for August and September, but Mercer insists that rounding enables them to accurately predict the actual values.
– Kip McDaniel