PERAC Memo #11 - 2012: 2012 Limits under Section 23 of Chapter 131 of the Acts of 2010
2012 Limits under Section 23 of Chapter 131 of the Acts of 2010
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PERAC Memo #11/2012 notifies boards that for members who joined a retirement system after January 1, 2011, the 2012 cap on regular compensation under Chapter 131, Section 23 of the Acts of 2010 is $160,000, calculated as 64% of the IRS Section 401(a)(17) limit of $250,000. Boards should apply this $160,000 ceiling when determining regular compensation for affected members' retirement calculations in 2012, and may contact PERAC's Actuary with questions.
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MEMORANDUM #11, 2012 Gregory R. Mennis M E M O R A N D U M TO: All Retirement Boards FROM: Joseph E. Connarton, Executive Director RE: 2012 Limits under Section 23 of Chapter 131 of the Acts of 2010 DATE: January 18, 2012 Pursuant to Section 23 of Chapter 131 of the Acts of 2010, “regular compensation for any person who becomes a member of a retirement system after January 1, 2011 shall not include salary, wages or other compensation in whatever form in any calendar year in excess of 64 per cent (64%) of the annual limitation that may be imposed under federal law on the amount of compensation that may be taken into account when calculating benefits under plans described in 26 U.S.C. 401(a) including, but not limited to, the applicable limits for any calendar year under 26 U.S.C. 401(a)(17).” For 2012, the general compensation limit found in U.S.C. 401(a)(17) is $250,000, as outlined in PERAC Memorandum #10/2012. Thus the 2012 limit on regular compensation under G.L. 32 for persons who became members after January 1, 2011 is $160,000. Please contact our Actuary, Jim Lamenzo, if you have any questions.