PERAC Memo #2 - 2022: 2022 Limits under Chapter 46 of the Acts of 2002
2022 Limits under Chapter 46 of the Acts of 2002
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This memo announces the 2022 federal compensation and benefit limits applicable to Massachusetts public retirement systems under Chapter 46 of the Acts of 2002. The general compensation limit under IRC § 401(a)(17) is $305,000 for 2022, while the § 415 benefit limit is $245,000 per year for members retiring at age 65 (reduced for retirement before age 62). These limits affect only the highest-paid employees and are indexed annually.
Full Text
TO: All Retirement Boards
FROM: John Parsons, Esq., Executive Director
RE: 2022 Limits under Chapter 46 of the Acts of 2002
DATE: January 10, 2022
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 2022 is $305,000. The general benefit limit for 2022 is $245,000 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.