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HomeMy WebLinkAbout04.d. Receive Information Regarding 2024 Internal Revenue Code (IRC) Limits that Apply for Pension Contributions and Pension BenefitsPage 1 of 2 Item 4.d. F--1-448�411C-S0 February 6, 2024 TO: ADMINISTRATION COMMITTEE FROM: TEJI O'MALLEY, HUMAN RESOURCES AND ORGANIZATIONAL DEVELOPMENT MANAGER REVIEWED BY: ROGER S. BAILEY, GENERAL MANAGER SUBJECT: RECEIVE INFORMATION REGARDING 2024 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. As limits change year to year, below is an update with the new limits for 2024, with the 2023 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 2023 IRC Limits for 2024 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 2023, is which, as indexed for 2024, is $330,000 $345,000 Subject to the Public Subject to the PEPRA limits On or after 1 /1 /13 Employees' Pension Reform which, as indexed for 2024, Act (PEP RA) limits which, as is $181,734 indexed for 2023, is $175,250 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 $360,000, contributions will not be made on any amount over $345,000 in calendar year 2024, and his or her pension cannot exceed $345,000, 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 Administration Committee meeting to answer any questions. February 6, 2024 Regular ADMIN Committee Meeting Agenda Packet - Page 60 of 63 Page 2 of 2 Strategic Plan Tie -In GOAL TWO: Environmental Stewardship Strategy 1 - Achieve compliance in all regulations February 6, 2024 Regular ADMIN Committee Meeting Agenda Packet - Page 61 of 63