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New Retirement Limits

The Internal Revenue Service (IRS) specifies annual retirement limits that determine the maximum amounts both you and the University may contribute to the retirement plans in any calendar year.

Calendar Year 2006 Limits

For calendar year 2006, your pre-tax contributions generally cannot exceed $15,000. However, this amount may be higher if you are at least 50 years of age and/or have at least 15 years of service with the University.

2006 Retirement Limits

Age

General
Pre-Tax Limit

Age 50
and Over Catch-up

Maximum Total
Annual Pre-Tax Contribution*

Up to age 49

$15,000

N/A

$15,000

Age 50 and over

$15,000

$5,000

$20,000

*Participants who have been employed with the University for fifteen (15) years or more may be eligible for an additional catch-up contribution.

The IRS also limits the amount of annual compensation that can be taken into account when calculating retirement contributions. For calendar year 2006, the annual compensation limit is $220,000.

Maximizing Your Contributions

If you want to maximize your contributions, you should contact the Retirement Call Center at 1-877-PENN-RET (1-877-736-6738) for assistance in determining the new contributions and the pay period amount.  If you stopped your supplemental contributions because you reached your maximum before the end of last year, you should call to have the supplemental deductions restored, since these deductions are not automatically restarted at the beginning of the new year.

Whether you are maximizing or not, you can make changes to your contribution amounts at any time. Go to the U@Penn website (www.upenn.edu/u@penn) and click on “Retirement benefits–view, enroll, change” under Benefits, or call the Retirement Call Center at 1-877-PENN-RET (1-877-736-6738). 

—Division of Human Resources

 



 
  Almanac, Vol. 52, No. 17, January 10, 2006

ISSUE HIGHLIGHTS:

Tuesday,
January 10, 2006
Volume 52 Number 17
www.upenn.edu/almanac

 

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