401K Changes for Tax Year 2000

Business Alert:   Your employees may defer up to $10,500 for year 2000 in their 401K Plan.  

Each year the government makes adjustments in the allowable deferred income in 401K plans.  For 2000 the individual limits have been increased by $500.00 over prior years to a total of $10,500.00.  This is considered a 'cost of living' adjustment by the Internal Revenue Service.  

Other Highlights: (See Online Resources below for more complete list)

The annual additions limitation for defined contribution plans remains unchanged at $30,000.  

The limitation for elective deferrals increases from $10,000 to $10,500.

The compensation limitation used to define highly compensated employees increases from $80,000 to $85,000.

ONLINE RESOURCES:

Pension Plan Limitations for Tax Year 2000

401K Sponsor Help Center

401K Resource Center

Employee Benefit Compliance Information and Tools

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