{"id":33291,"date":"2008-03-26T16:35:41","date_gmt":"2008-03-26T21:35:41","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/uncategorized\/irs-announces-2001-cost-of-living-adjustments-for-benefit-plans.html"},"modified":"2008-03-26T16:35:41","modified_gmt":"2008-03-26T21:35:41","slug":"irs-announces-2001-cost-of-living-adjustments-for-benefit-plans","status":"publish","type":"corporate","link":"https:\/\/corporate.findlaw.com\/human-resources\/irs-announces-2001-cost-of-living-adjustments-for-benefit-plans.html","title":{"rendered":"IRS Announces 2001 Cost of Living Adjustments for Benefit Plans"},"content":{"rendered":"<section class=\"fl-gutenberg-byline\">\n    <div class=\"fl-gutenberg-byline-content\">\n                    <p><em>This article was edited and reviewed by <a href=\"https:\/\/www.findlaw.com\/company\/our-team.html\" rel=\"noopener\">FindLaw Attorney Writers<\/a><\/em><\/p>\n\n                | Last reviewed\n        <time>\n                            May 22, 2026\n                    <\/time>\n    <\/div>\n\n    \n    <details class=\"fl-gutenberg-byline-toggle fl-gutenberg-byline-legally-reviewed\">\n        <summary>\n            <i class=\"fl-gutenberg-byline-icon\" aria-hidden=\"true\"><\/i>\n            Legally Reviewed\n        <\/summary>\n\n        <div class=\"fl-gutenberg-byline-toggle-content\">\n            <p><em>This article has been written and reviewed for legal accuracy, clarity, and style by <a href=\"https:\/\/www.findlaw.com\/company\/our-team.html\" rel=\"noopener\">FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with <a href=\"https:\/\/www.findlaw.com\/company\/company-history\/editorial-policy.html\" rel=\"noopener\">our editorial standards<\/a>.<\/em><\/p>\n\n        <\/div>\n    <\/details>\n\n    <details class=\"fl-gutenberg-byline-toggle fl-gutenberg-byline-fast-checked\">\n        <summary>\n            <i class=\"fl-gutenberg-byline-icon\" aria-hidden=\"true\"><\/i>\n            Fact-Checked\n        <\/summary>\n\n        <div class=\"fl-gutenberg-byline-toggle-content\">\n            <p><em>The last updated date refers to the last time this article was reviewed by FindLaw or one of our <a href=\"https:\/\/www.findlaw.com\/company\/our-team\/contributing-authors.html\" rel=\"noopener\">contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please <a href=\"https:\/\/lawyers.findlaw.com\/?fli=bylinelink\" rel=\"noopener\">contact an attorney in your area<\/a>.<\/em><\/p>\n\n        <\/div>\n    <\/details>\n<\/section>\n\n\n\n<div class=\"rxbodyfield\" xmlns:o=\"urn:www.microsoft.com\/office\" xmlns:st1=\"urn:www.microsoft.com\/smarttags\" xmlns:w=\"urn:www.microsoft.com\/word\" xmlns:x=\"urn:www.microsoft.com\/excel\"><p>The IRS recently announced the cost-of-living adjustments effective January 1, 2001 for the various dollar limits applicable to retirement plans. The 2001 dollar limits are:<\/p><ul><li><b>401-K Plans:<\/b> The annual limit on before-tax elective deferrals remains at $10,500. Remember that this limit applies to the participant&#8217;s tax year, which most likely is the calendar year.<br\/><br\/><\/li><li><b>Defined Benefit Plans:<\/b> The maximum annual benefit that can be accrued at age 65 under a defined benefit plan has increased from $135,000 to $140,000.<br\/><br\/><\/li><li><b>Defined Contribution Plans (profit sharing, money purchase, etc.):<\/b> The maximum annual contribution is increased from $30,000 to $35,000 for the 2001 limitation year.<br\/><br\/><\/li><li><b>403-B Tax Sheltered Annuities and Custodial Accounts:<\/b> The limit on salary reduction contributions remains at $10,500. The dollar limits under any of the alternative elections also remain the same.<br\/><br\/><\/li><li><b>Eligible 457 Plans:<\/b> The limit on deferrals under eligible 457 deferred compensation plans of state and local governments and tax-exempt organizations is increased from $8,000 to $8,500 in 2001.<br\/><br\/><\/li><li><b>Highly Compensated Employees:<\/b> The threshold for determining who is a &#8220;highly compensated employee&#8221; for purposes of various limits on benefits under retirement plans remains at $85,000 for 2001.<br\/><br\/>Keep in mind that the determination of who is &#8220;highly compensated&#8221; involves looking at compensation during the previous plan year. When you are deciding if someone is &#8220;highly compensated&#8221; for 2001, you look at the compensation for the 2000 plan year and determine whether that amount exceeds $85,000. When you are deciding if someone is &#8220;highly compensated&#8221; for 2002, you look at the compensation for the 2001 plan year and determine whether that amount exceeds $85,000.<br\/><br\/><\/li><li><b>Compensation Limit:<\/b> The limit on the compensation used for determining benefits for all qualified retirement plans and tax sheltered annuities or custodial accounts remains at $170,000 for plan years beginning in 2001.<br\/><br\/><\/li><li><b>Integration Level:<\/b> The maximum amount of pay considered FICA wages, which is the maximum &#8220;integration level&#8221; for plans using &#8220;permitted disparity,&#8221; is increased from $76,200 to $80,400 for 2001.<\/li><\/ul><p>The IRS announcement also covers several other dollar limits of more limited application. Those limits affect such things as simplified employee pension programs, simple retirement accounts and ESOPs.<\/p><\/div>","protected":false},"excerpt":{"rendered":"<p>The IRS recently announced the cost-of-living adjustments effective January 1, 2001 for the various dollar limits applicable to retirement plans. The 2001 dollar limits are:  The maximum amount of pay considered FICA wages, which is the maximum &#8230;<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_categories":[6488,6486],"class_list":["post-33291","corporate","type-corporate","status-publish","hentry","corporate_categories-human-resources__hr-benefits","corporate_categories-human-resources"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate\/33291","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=33291"}],"wp:term":[{"taxonomy":"corporate_categories","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_categories?post=33291"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}