PERAC Memo #5 - 2020: 2020 Limits under Chapter 46 of the Acts of 2002
2020 Limits under Chapter 46 of the Acts of 2002
View original on mass.gov →Summary
Sets the 2020 IRC Section 401(a)(17) compensation limit at $285,000 and the Section 415 benefit limit at $230,000 per year for retirement at age 65 (reduced for retirement before age 62). These federal limits, required under Chapter 46 of the Acts of 2002, apply only to the highest-paid members and affect the regular compensation used to calculate retirement allowances.
Full Text
Memorandum Memorandum #05: 2020 Limits under Chapter 46 of the Acts of 2002 Date: 01/06/2020 Referenced Sources: PERAC Website PERAC Memo #05, 2020
Skip table of contents Table of Contents To All Retirement Boards: Commission Members Downloads Contact To All Retirement Boards: M E M O R A N D U M
TO: All Retirement Boards
FROM: John W. Parsons, Esq., Executive Director
RE: 2020 Limits under Chapter 46 of the Acts of 2002
DATE: January 13, 2020
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 2020 is $285,000. The general benefit limit for 2020 is $230,000 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 John Boorack if you have any questions.