PERAC Memo #3 - 2026: 2026 Limits under Chapter 46 of the Acts of 2002
2026 Limits under Chapter 46 of the Acts of 2002
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PERAC announces the 2026 federal limits that apply to Massachusetts retirement system members under Chapter 46 of the Acts of 2002, which brought state law into compliance with IRC requirements. The 2026 Section 401(a)(17) compensation limit is $360,000, and the Section 415 benefit limit is $290,000 per year for members retiring at age 65 (reduced for those retiring before 62). These limits are indexed annually and affect only the highest-paid employees; most members are unaffected.
Full Text
Memorandum PERAC Memo #3: 2026 Limits under Chapter 46 of the Acts of 2002 Date: 01/09/2026 Referenced Sources: PERAC Website PERAC Memo #03 2026
To All Retirement Boards: TO: All Retirement Boards
FROM: William T. Keefe, Executive Director
RE: 2026 Limits under Chapter 46 of the Acts of 2002
DATE: January 9, 2026
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 2026 is $360,000. The general benefit limit for 2026 is $290,000 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.