Law Increases 401K Annual Limits
This is my site Written by Administrator on May 13, 2009 – 9:59 am

On August 7, 2008, the Governor of Puerto Rico signed into law Act 186, which increases the pre-tax contribution limits for Section 1165(e) savings plans. Under prior law, pre-tax contributions were limited to the lesser of 10 percent of compensation or $8,000 per year. The new law removes immediately the 10 percent cap, so that the limit for 2008 plan years is $8,000 regardless of compensation. It also increased the annual limits for plan years beginning in 2009 and thereafter as follows:

Plan Year Contribution Limit
2009 and 2010 $ 9,000
2011 and 2012 $ 10,000
2013 and beyond $ 12,000

Beginning with 2007 plan years, employees who have attained or will attain age 50 by the end of the plan year and whose pre-tax contributions have reached the applicable limit for the year may also make a pre-tax catch-up contribution of up to $1,000.

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