PERAC Memo #2 - 2023: 2023 Limits under Chapter 46 of the Acts of 2002

PERAC MEMO # 2 / 2023 M E M O R A N D U M TO: All Retirement Boards FROM: John W. Parsons, Esq., Executive Director RE: 2023 Limits under Chapter 46 of the Acts of 2002 DATE: January 10, 2023 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 2023 is $ 330,000. The general benefit limit for 2023 is $ 265,000 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. JWP/jfb p:\actuaria\general\ch462023.docx PERAC Auditor SUZANNE M. BUMP | KATHLEEN M. FALLON | KATE FITZPATRICK | JAMES J. GUIDO | RICHARD MACKINNON, JR. | JENNIFER F. SULLIVAN, ESQ. JOHN W. PARSONS, ESQ., Executive Director FIVE MIDDLESEX AVENUE, SUITE 304 | SOMERVILLE, MA 02145 PH 617 666 4446 | FAX 617 628 4002 | TTY 617 591 8917 | WWW.MASS.GOV/PERAC COMMONWEALTH OF MASSACHUSETTS | PUBLIC EMPLOYEE RETIREMENT ADMINISTRATION COMMISSION PHILIP Y. BROWN, ESQ., Chair