November 1997 Vol.II, No.2
ERISA, EMPLOYEE BENEFITS AND EXECUTIVE COMPENSATION NEWSLETTER
The Internal Revenue Service has announced the following 1998 dollar limits for qualified plans and other tax-favored retirement plans. The lull in the indexing of most of the limits is due to low inflation and the new laws enacted to slow the indexing.
| 1997 | 1998 | |
| Maximum annual payout from a defined plan at the social security normal retirement age | $125,000 | $130,000 |
| Maximum annual contribution to an individual's defined contribution account | $30,000 | $30,000 |
| Maximum elective Section 401(k) and 403(b) deferrals | $9500 | $10,000 |
| Maximum amount of annual compensation that can be taken into account for determining benefits or contributions under a qualified plan | $160,000 | $160,000 |
| Test to identify highly compensated employees | $80,000 | $80,000 |
The Social Security Administration has announced the 1998 inflation-adjusted dollar tests and limits for Social Security benefits:
| Wage Base: | 1997 | 1998 |
| for Social Security Tax | $65,400 | $68,400 |
| for medicare | No Limit | No Limit |
| Maximum benefit at age 65 (for an individual attaining age 65 who has received no wages beyond age 62) | $1,311.40 per month |
$1,387.00 per month |
| Earnings Test (amount that can be earned before benefits are cut) | ||
| Age 65-69 | $13,500/yr. | $14,500/yr. |
| Under Age 65 | $8,640/yr. | $9,120/yr. |