PERAC Memo #2 - 2015: 2015 Limits under Section 23 of Chapter 131 of the Acts of 2010
2015 Limits under Section 23 of Chapter 131 of the Acts of 2010
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PERAC Memo #2/2015 sets the 2015 cap on regular compensation for members who joined a retirement system after January 1, 2011, at $169,600—64% of the IRS Section 401(a)(17) limit of $265,000 for that year. Boards must apply this figure when calculating regular compensation for affected members and should ensure payroll/compensation reporting for these members does not exceed this cap. No further action beyond application of the limit is required; questions can be directed to PERAC's Actuary, Jim Lamenzo.
Full Text
PERAC MEMO # 2/2015
M E M O R A N D U M TO: All Retirement Boards FROM: Joseph E. Connarton, Executive Director RE: 2015 Limits under Section 23 of Chapter 131 of the Acts of 2010
DATE: January 5, 2015
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 2015, the general compensation limit found in U.S.C. 401(a)(17) is $265,000, as outlined in PERAC Memorandum #1/2015. Thus the 2015 limit on regular compensation under G.L. 32 for persons who became members after January 1, 2011 is $169,600.
Please contact our Actuary, Jim Lamenzo, if you have any questions.