PERAC Memo #3 - 2017: 2017 Limits under Chapter 46 of the Acts of 2002
2017 Limits under Chapter 46 of the Acts of 2002
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This memo announces the federal compensation and benefit limits applicable to Massachusetts retirement systems for 2017 under Chapter 46 of the Acts of 2002, which brought state law into compliance with IRS requirements. For 2017, the Section 401(a)(17) compensation limit is $270,000 and the Section 415 annual benefit limit is $215,000 for members retiring at age 65. These limits affect only the highest-paid employees and boards should contact PERAC's actuary with questions.
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M E M O R A N D U M
TO: All Retirement Boards
FROM: Joseph E. Connarton, Executive Director
RE: 2017 Limits under Chapter 46 of the Acts of 2002
DATE: January 5, 2017
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 2017 is $270,000. The general benefit limit for 2017 is $215,000 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.