2013 Pension Limits

I. Annual Plan Limitations for 2012 and 2013 – Many of the most important limitations have changed for the 2013 plan year. Below is a list of these limitations for the 2012 and 2013 plan years:

II. “Save My 401(k)” Campaign – Congress is considering reducing the contribution limitations to qualified retirement plans, including 401(k) and profit sharing plans. These changes will severely impact the amounts that owners and their employees save for retirement through these plans. This will cause an even worse burden on our already fragile social security system. Please visit www.savemy401k.com to learn more about this extremely important issue.

III. Leased Employee Issues – Even if an individual is not an employee of the plan sponsor, if that individual is considered a “leased employee,” he or she may still be required to be covered by the plan sponsor’s retirement plan. Leased employees include both individuals that are leased through another company and certain individuals paid via 1099 as independent contractors. In particular, individuals that provide services (other than as professionals) to the plan sponsor for more than 1,500 hours per year will likely be considered leased employees. Please be sure to inform us of any such individuals in the annual materials that you provide to us.

IV. 401(k) Deferral Election Forms – Plan Sponsors of 401(k) plans must provide eligible employees with “Deferral Election” or “Salary Reduction Agreement” Forms prior to the beginning of each plan year. It is important that the completed forms are collected by the Plan Sponsor. Plan Sponsors can then provide proof (ex: to the IRS and DOL, if necessary) that each eligible employee has had the opportunity to commence or alter his or her election. The IRS has started focusing its efforts on ensuring that plan sponsors provide these forms to eligible employees and retain copies of the completed forms, especially for employees who elect not to make their own 401(k) deferral contributions. Accordingly, it is imperative for sponsors of 401(k) plans to ensure they receive completed forms from all eligible employees. Please send us copies of all completed forms for our records.

V. “New and Improved” Forms – Please note that we have improved our annual census request and questionnaire. Once received, please read and complete these forms carefully, as these forms are critical to ensuring that your plan is properly administered.