2010 Hay Group Benefits 2011 Retirement and Welfare Plan Limits

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1 November 2010 Hay Group Benefits 2011 Reference Guide 2011 Retirement and Health and Welfare Plan Limits, Social Security and Medicare Changes Including a Table of Retirement Plan Limits from 1990 to Present Plan administrators must concern themselves with a broad array of annual limits and thresholds that affect a variety of employee benefits. This Reference Guide consolidates these limits to give plan administrators quick access to this information and includes the OASDI relief contained in the 2010 Tax Relief Act, signed into law by President Obama December 17, Hay Group, Inc. The Wanamaker Building 100 Penn Square East Philadelphia, PA (215) Page 1 lists updated limits and other cost-of-living adjusted numbers affecting retirement plans. Page 2 lists 2011 health, welfare and fringe benefit plan limits and 2011 figures needed to determine Social Security benefits and contributions. Page 3 lists 2011 Medicare premiums. Page 4 provides key retirement plan-related annual limits from 1990 to Page 5 provides the 2011 covered compensation tables Limits and Other Cost-of-Living Adjusted Numbers Affecting Retirement Plans Maximum 401(k), 403(b) and 457(b) Deferrals (402(g)(1)) $ 16,500* Age 50 or Over Catch-up Contribution Limit (414(v)(2)(B)(i)) 5,500* Defined Contribution Maximum Annual Addition (415(c)(1)(A)) 49,000* Hay Group is a global management consulting firm that works with leaders to transform strategy into reality and to help people and organizations realize their potential. HCE Compensation Threshold (414(q)(1)(B)) 110,000* Defined Benefit Maximum Annual Benefit (415(b)(1)(A)) 195,000* Limit on Compensation (401(a)(17)) 245,000* Social Security Maximum Taxable Earnings 106,800* * unchanged from This Hay Group Benefits Reference Guide is designed to provide accurate information, but is not intended as legal advice for which the services of an attorney should be sought. If you would like more information about any of the topics covered in this Reference Guide or other benefits issues, contact your Hay Group Consultant or Melissa Rasman at (215) or Robert Landau at (703)

2 2011 Limits for Health, Welfare and Fringe Benefit Plans Adoption Assistance Tax Credit Maximum $13,360 Qualified Long-Term Care Insurance Transportation: Transit and Commuter Highway Vehicle Transportation: Parking Health Savings Accounts (HSAs) and High Deductible Health Plan (HDHP) Medical Savings Accounts (MSAs) and High Deductible Health Plan (HDHP) * unchanged from 2010 $300 per diem $230 per month* $230 per month* Contribution Limit per Individual: $3,050* Contribution Limit per Family: $6,150* Catch-up for Age 55 and Over: $1,000* Out-of-Pocket Maximum per Individual: $5,950* Out-of-Pocket Maximum per Family: $11,900* Minimum Deductible for Self-Only Coverage: $1,200* Minimum Deductible for Family Coverage: $2,400* Out-of-Pocket Maximum for Self-Only Coverage: $4,100 Out-of-Pocket Maximum for Family Coverage: $7,500 Deductible (Range) for Self-Only Coverage: $2,050 to $3,050 Deductible (Range) for Family Coverage: $4,100 to $6, Social Security Benefits and Contribution Figures Annual Cost-of-Living Adjustment 0.0% * OASDI (Social Security) Contribution and Benefits Base $106,800* Employer/Employee Social Security (OASDI) Tax Rate 4.20% Medicare (HI) Wage Base No limit* Employer/Employee Medicare (HI) Tax Rate 1.45%* National Average Wage Index for 2009 $40, Primary Insurance Amount Bend Points $749 / $4,517 Family Maximum Benefit Bend Points $957 / $1,382 / $1,803 "Old-law" Contribution and Benefits Base $79,200* Earnings required for a quarter of coverage $1,120* Retirement Earnings Test Exempt Amounts** (Year Individual Reaches Full Retirement Age) The exempt amounts apply only to earnings for months before the individual attains full retirement age. $1 in benefits will be withheld for every $3 in earnings above the limit. Retirement Earnings Test Exempt Amounts** (Under Full Retirement Age) $1 in benefits will be withheld for every $2 in earnings above the limit. $37,680 per year* $3,140 per month* $14,160 per year* $1,180 per month* * unchanged from 2010 ** Social Security withholds benefits if an individual s earnings exceed a certain level, called a retirement earnings test exempt amount. There is no limit on earnings beginning in or after the month an individual attains Social Security full retirement age. The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 reduced the employee s OASDI tax rate for 2011 was reduced to 4.2% Hay Group. All Rights Reserved. Material may be reprinted if proper credit is given. 2

3 2011 MEDICARE PREMIUMS PART A Qualifications Premium 40 or more quarters of Medicare covered employment by employee or spouse $0 Less than 30 quarters of Medicare covered employment and not otherwise eligible for premium free Part A coverage $ quarters of Medicare covered employment $248 Annual Deductible: varies by service and length of time for treatment Yearly Income Level in 2010 PARTS B and D Part B Income-Related Adjustment Amount Total Premium Amount Part D Means-Tested Additional Premium** Individual Tax Return Filers Beneficiaries Who File Joint Tax Returns Less than or equal to Less than or equal to $85,000 $170,000 $0 $115.40* $0 Greater than $85,000 not Greater than $170,000 more than $107,000 not more than $214,000 $46.10 $ $12.00 Greater than $107,000 Greater than $214,000 not more than $160,000 not more than $320,000 $ $ $31.10 Greater than $160,000 Greater than $320,000 not more than $214,000 not more than $428,000 $ $ $50.10 More than $214,000 More than $428,000 $ $ $69.10 Beneficiaries who are married but file a separate tax return from their spouse Less than or equal to $85,000 $0 $ $0.00 Greater than $85,000 and less than or equal to $129,000 $ $ $50.10 Greater than $129,000 $ $ $69.10 Annual Deductible $162 Varies by Plan * Pre-2011 Social Security beneficiaries whose yearly income is not more than $170,000 and who have Part B premiums deducted from their Social Security checks will have no increase in their Part B premiums from 2009 because of the application of the hold-harmless provision, which prohibits an individual s Part B premiums from increasing in any one year by more than that individual s cost-of-living increase in Social Security benefits. **The Part D premium varies by plan. The premium amounts below are in addition to the base Part D premium Hay Group. All Rights Reserved. Material may be reprinted if proper credit is given. 3

4 Year Defined Benefit Maximum Annual Benefit (415(b)(1)(A)) Table of Historical Limits and Other Numbers Affecting Retirement Plans Defined Contribution Maximum Annual Addition (415(c)(1)(A)) Maximum 401(k), 403(b) and 457(b) Deferrals (402(g)(1)) Age 50 or Over Catch-up Contributions (414(v)(2)(B)(i)) HCE Compensation Threshold (414(q)(1)(B)) Limit on Compensation (401(a)(17)) Social Security Maximum Taxable Earnings Maximum PBGC Guaranteed Benefit 1990 $ 102,582 $30,000 $7,979 N/A $85,485 $209,200 $51,300 $2, ,963 30,000 8,475 N/A 90, ,220 53,400 2, ,221 30,000 8,728 N/A 93, ,860 55,500 2, ,641 30,000 8,994 N/A 96, ,840 57,600 2, ,800 30,000 9,240 N/A 99, ,000 60,600 2, ,000 30,000 9,240 N/A 100, ,000 61,200 2, ,000 30,000 9,500 N/A 100, ,000 62,700 2, ,000 30,000 9,500 N/A 80, ,000 65,400 2, ,000 30,000 10,000 N/A 80, ,000 68,400 2, ,000 30,000 10,000 N/A 80, ,000 72,600 3, ,000 30,000 10,500 N/A 85, ,000 76,200 3, ,000 35,000 10,500 N/A 85, ,000 80,400 3, ,000 40,000 11,000 $1,000 90, ,000 84,900 3, ,000 40,000 12,000 2,000 90, ,000 87,000 3, ,000 41,000 13,000 3,000 90, ,000 87,900 3, ,000 42,000 14,000 4,000 95, ,000 90,000 3, ,000 44,000 15,000 5, , ,000 94,200 3, ,000 45,000 15,500 5, , ,000 97,500 4, ,000 46,000 15,500 5, , , ,000 4, ,000 49,000 16,500 5, , , ,800 4, ,000 49,000 16,500 5, , , ,800 4, ,000 49,000 16,500 5, , , ,800 4, Hay Group. All Rights Reserved. Material may be reprinted if proper credit is given. 4

5 2011 Social Security Covered Compensation Tables Calendar Year of Birth Calendar Year Person Attains SSNRA* 2011 Covered Compensation Table (Exact Amount) 2011 Covered Compensation Table (Rounded to the nearest multiple of $3000) $ 48,816 $ 48, ,348 51, ,952 54, ,628 57, ,268 60, ,884 63, ,464 63, ,008 66, ,408 69, ,724 72, ,920 75, ,044 75, ,084 78, ,052 81, ,972 81, ,620 87, ,384 87, ,064 90, ,660 90, ,184 93, ,648 93, ,052 96, ,372 96, ,680 99, ,940 99, ,116 99, , , , , , , , , , , , , , , , , , , , , and later , ,800 *Social Security Normal Retirement Age 2011 Hay Group. All Rights Reserved. Material may be reprinted if proper credit is given. 5