PERAC Memo #3 - 2016: 2016 Limits under Section 23 of Chapter 131 of the Acts of 2010
2016 Limits under Section 23 of Chapter 131 of the Acts of 2010
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PERAC Memo #3/2016 establishes the 2016 cap on regular compensation for members who joined a retirement system after January 1, 2011, as required under Section 23 of Chapter 131 of the Acts of 2010. Since the 2016 IRS 401(a)(17) compensation limit is $265,000, the corresponding 64% limit under G.L. c. 32 is $169,600. Boards should apply this $169,600 cap when calculating regular compensation for affected members in 2016; no further action is required beyond ensuring compliance.
Full Text
PERAC MEMO # 3/2016
M E M O R A N D U M TO: All Retirement Boards FROM: Joseph E. Connarton, Executive Director RE: 2016 Limits under Section 23 of Chapter 131 of the Acts of 2010
DATE: January 8, 2016
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 2016, the general compensation limit found in U.S.C. 401(a)(17) is $265,000, as outlined in PERAC Memorandum #2/2016. Thus the 2016 limit on regular compensation under G.L. 32 for persons who became members after January 1, 2011 is $169,600.
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