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Quarterly Considerations – 12/31/2012

Plan Sponsors

Save More ‐ 401(k) plan contribution limits rise to $17,500 in 2013. For participants age 50 and older, catch‐up contributions rise to $5,500. Approximately 5 percent of the 60+million 401(k) plan participants maximize contributions.

Save Less? ‐ The tax deferral advantage for retirement savings will get plenty of attention in tax‐reform talks. 2013’s fiscal budget proposed budget estimates that during the next five years alone, retirement tax deductions add up to $419 billion in lost tax revenue. We’ll keep you informed of developments.

Roth & Roll ‐ As part of the fiscal cliff deal, new legislation permits any amounts in 401(k), 403(b) and 457 plans to be converted to Roth. Conversions are taxed at today’s rates, but allow for tax‐free distributions under the Roth provision. The plan must permit Roth deferral contributions and conversions. Let us assist you in analyzing a Roth feature.

Positively Funded Status ‐ Rising equity markets and falling liabilities combined to improve the funded status of the typical U.S. corporate pension plan in 2012. The funded status rose 1% to 76.3%, according to BNY Mellon.

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