The Internal Revenue Code provides for dollar limitations on benefits and contributions under qualified retirement plans, and requires that the Commissioner annually adjust these limits for cost of living increases. Other limitations applicable to deferred compensation plans are also affected by these adjustments. The limitations that are adjusted generally will change for 2012 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment.
Effective January 1, 2012, the limitation on the annual benefit under a defined benefit plan is increased from $195,000 to $200,000. The limitation for defined contribution plans is increased in 2012 from $49,000 to $50,000.
The press release includes more details on both the adjusted and unchanged limitations. You may also view the IRS cost-of-living-adjustment table.