PERAC Memo #1 - 2015: 2015 Limits under Chapter 46 of the Acts of 2002
2015 Limits under Chapter 46 of the Acts of 2002
View original on mass.gov →Summary
PERAC Memo #1/2015 provides the annual IRC compensation and benefit limits under Chapter 46 of the Acts of 2002 for calendar year 2015: a $265,000 compensation cap (Section 401(a)(17)) and a $210,000 benefit cap at age 65 (Section 415), with the benefit limit reduced for retirement before age 62. These limits primarily affect only the highest-paid members, and boards should apply them when calculating retirement allowances for affected members, contacting PERAC's Actuary Jim Lamenzo with questions—no other action is required.
Full Text
PERAC MEMO # 1/2015
M E M O R A N D U M TO: All Retirement Boards FROM: Joseph E. Connarton, Executive Director RE: 2015 Limits under Chapter 46 of the Acts of 2002
DATE: January 5, 2015
Prior PERAC Memos (# 27/2002, # 45/2002, and #17/2003) briefly outlined Chapter 46 of the Acts of 2002. This law brought the Massachusetts Retirement Law into compliance with Federal Limitations on the compensation used to calculate retirement allowances and the dollar amounts of retirement allowances. This provision generally affects only the highest paid employees and will not apply to most retirement system members.
The regulations regarding Section 401(a)(17) (compensation limit) and Section 415 (benefit limit) of the Internal Revenue Code are quite complex and can vary under individual circumstances. The general compensation limit for 2015 is $265,000. The general benefit limit for 2015 is $210,000 per year for a member retiring at age 65 although this limit is generally reduced for retirement prior to age 62. These limitations are indexed each year.
Please contact our Actuary, Jim Lamenzo, if you have any questions.