PERAC Memo #4 - 2017: 2017 Limits under Section 23 of Chapter 131 of the Acts of 2010
2017 Limits under Section 23 of Chapter 131 of the Acts of 2010
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This memo announces the 2017 regular compensation cap for members who joined a retirement system after January 1, 2011, under pension reform provisions of Chapter 131 of the Acts of 2010. The cap is set at 64% of the federal IRC § 401(a)(17) limit, resulting in a maximum regular compensation of $172,800 for 2017. Boards must apply this limit when calculating contributions and benefits for post-2011 members.
Full Text
M E M O R A N D U M
TO: All Retirement Boards
FROM: Joseph E. Connarton, Executive Director
RE: 2017 Limits under Section 23 of Chapter 131 of the Acts of 2010
DATE: January 5, 2017
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 2017, the general compensation limit found in U.S.C. 401(a)(17) is $270,000, as outlined in PERAC Memorandum #2/2017. Thus the 2017 limit on regular compensation under G.L. 32 for persons who became members after January 1, 2011 is $172,800.
Please contact our Actuary, Jim Lamenzo, if you have any questions.