HomeMy WebLinkAbout7.b. Receive information regarding Internal Revenue Code (IRC) limits that apply for pension contributions and pension benefits Page 1 of 1
Item 7.b.
,orVIOIN SAN
December 1, 2020
TO: ADMINISTRATION COMMITTEE
FROM: TEJI O'MALLEY, HUMAN RESOURCES AND ORGANIZATIONAL
DEVELOPMENT MANAGER
REVIEWED BY: ROGER S. BAILEY, GENERAL MANAGER
SUBJECT: RECEIVE INFORMATION REGARDING INTERNAL REVENUE CODE (IRC)
LIMITS THATAPPLYFOR PENSION CONTRIBUTIONS AND PENSION
BENEFITS
This memo is to provide information to the Administration Committee and the Board of Directors related to
the Internal Revenue Code (I RC) limits that apply for pension contributions and pension benefits. The
limits vary for employees depending upon when they became members of Contra Costa County
Employees' Retirement Association (CCCERA) and are as follows:
Date of CCCERA IRC Limits
Membership
Prior to 12/31/95 Not subject to the I RC limits for either their contributions
or their pension benefits
On or after 1/1/96 Subject to the I RC 401(a) limit which, as indexed for
but before 12/31/12 2020, is $285,000
Subject to the Public Employees' Pension Reform Act
On or after 1/1/13 (PEPRA) limits which, as indexed for 2020, are $126,291
(enrolled in Social Security) and $151,549 (no Social
Security)
Contributions during employment will cease once the limit has been met, and the final pension benefit after
retirement cannot exceed the limits exclusive of any cost of living adjustments. For example, if a legacy
employee (date of CCCERA membership on or after January 1, 1996 but before December 31, 2012)
earns a salary of $300,000, contributions will not be made on any amount over$285,000 in calendar year
2020, and his or her pension cannot exceed $285,000, irrelevant of the years of service, retirement factor,
or age. Although the limits are different for PEP RA employees, the same concept applies.
Staff will be available at the meeting to answer any questions.
Strategic Plan Tie-In
GOAL TWO: Environmental Stewardship
Strategy 1—Achieve 100% compliance in all regulations
December 1, 2020 Regular ADM IN Committee Meeting Agenda Packet- Page 27 of 54