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| NEWSLETTERS
Volume 4, Issue 1 .................... August 2003 2003 Plan Limits 2003 is another great year from a contribution limit standpoint. The annual 401(k) salary reduction contribution limit for the 2003 calendar year is $12,000. Participants can now contribute 100% of their wages up to $12,000. Note, if your plan document had previously limited the percentage that participants could contribute to the 401(k) plan, it probably has been changed during the GUST restatement. The additional catch-up contribution limit for participants who are more than 50 years old or will attain the age of 50 during 2003 is $2,000. The 415 limit, or the total employee and employer contributions, excluding catch-up contributions, plus forfeitures credited to each participant’s account during the plan year, is the lesser of $40,000 or 100% of the participant’s wages for the plan year. The compensation threshold used for determining highly compensated employees for nondiscrimination testing purposes remains at $90,000 for 2003. Highly compensated employees are determined by using the employees’ wages from the prior year. Thus, for the 2003 nondiscrimination testing, highly compensated employees are either owners or employees who earned more than the $90,000 compensation threshold in 2002. The annual compensation limit remains at $200,000, which means that only wages up to that amount are taken into account for retirement plan purposes. The social security wage base has increased to $87,000 from $84,900.
© Administrative Retirement Services, Inc. 2000 Published by Administrative Retirement Services, Inc., Copyright 2001 by Administrative Retirement Services, Inc. Reproduction in whole or in part is prohibited except by written permission. All rights are reserved. Information has been obtained by Administrative Retirement Services, Inc. from sources believed to be reliable. However, because of the possibility of human or mechanical error by our sources, Administrative Retirement Services, Inc. or others, Administrative Retirement Services, Inc. does not guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions or the result obtained from the use of such information. Readers should seek specific advice before acting with regard to the subjects mentioned here. |