HomeMy WebLinkAbout05.b. Receive information regarding 2021 Internal Revenue Code (IRC) limits that apply for pension contributions and pension benefits Page 1 of 2
Item 5.b.
CENTRAL SAN
Y-109-ITMEN ME
January 12, 2021
TO: ADMINISTRATION COMMITTEE
FROM: TEJI O'MALLEY, HUMAN RESOURCES AND ORGANIZATIONAL
DEVELOPMENT MANAGER
REVIEWED BY: ROGER S. BAILEY, GENERAL MANAGER
SUBJECT: RECEIVE INFORMATION REGARDING 2021 INTERNAL REVENUE CODE
(IRC) LIMITS THATAPPLY FOR PENSION CONTRIBUTIONS AND
PENSION BENEFITS
This memo is to provide an update 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
Committee received information on the 2020 limits at its December 1, 2020 meeting. As limits vary year to
year, below is an update with the new limits for 2021, with the 2020 limits included for reference.
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 for 2020 IRC Limits for 2021
Membership
Not subject to the I RC limits for Not subject to the I RC limits for
Prior to 12/31/95 neither their contributions nor neither their contributions nor
their pension benefits their pension benefits
On or after 1/1/96 Subject to the I RC 401(a) limit Subject to the I RC 401(a) limit
but before 12/31/12 which, as indexed for 2020, is which, as indexed for 2021, is
$285,000 $290,000
Subject to the Public Subject to the PEPRA limits
On or after 1/1/13 Employees' Pension Reform which, as indexed for 2021,
Act (PEP RA) limits which, as is $153,671
indexed for 2020, is $151,549
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$290,000 in calendar year
2021, and his or her pension cannot exceed $290,000, irrelevant of the years of service, retirement factor,
or age. Although the limits are different for PEPRA employees, the same concept applies.
Staff will be available at the Committee meeting to answer any questions.
January 12, 2021 Regular ADMIN Committee Meeting Agenda Packet- Page 32 of 41
Page 2 of 2
Strategic Plan Tie-In
GOAL TWO:Environmental Stewardship
Strategy 1—Achieve 100%compliance in all regulations
January 12, 2021 Regular ADMIN Committee Meeting Agenda Packet- Page 33 of 41