PERAC Memo #3 - 2022: 2022 Limits under Section 23 of Chapter 131 of the Acts of 2010
2022 Limits under Section 23 of Chapter 131 of the Acts of 2010
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This memo establishes the 2022 regular compensation cap for members who joined a Massachusetts retirement system after January 1, 2011, pursuant to Section 23 of Chapter 131 of the Acts of 2010. Because the federal § 401(a)(17) compensation limit for 2022 is $305,000, the 2022 cap on regular compensation for post-2010 members is $195,200 (64% of $305,000). Boards must apply this limit when calculating retirement benefits for affected members.
Full Text
TO: All Retirement Boards
FROM: John Parsons, Esq., Executive Director
RE: 2022 Limits under Section 23 of Chapter 131 of the Acts of 2010
DATE: January 10, 2022
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 percent (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 2022, the general compensation limit found in U.S.C. 401(a)(17) is $305,000, as outlined in PERAC Memorandum #2/2022. Thus the 2022 limit on regular compensation under G.L. 32 for persons who became members after January 1, 2011, is $195,200.
Please contact John Boorack if you have any questions.