HomeMy WebLinkAbout05.a. Receive information regarding 2025 Internal Revenue Code (IRC) limits that apply for pension contributions and pension benefitsPage 1 of 2
Item 5.a.
F--1-448�411C-S0
January 14, 2025
TO: ADMINISTRATION COMMITTEE
FROM: TEJI O'MALLEY, HUMAN RESOURCES AND ORGANIZATIONAL
DEVELOPMENT MANAGER
REVIEWED BY: ROGER S. BAILEY, GENERAL MANAGER
SUBJECT: RECEIVE INFORMATION REGARDING 2025 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 2025, with the 2024 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 2024
IRC Limits for 2025
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 2024, is
which, as indexed for 2025, is
$345,000
$350,000
Subject to the Public
Subject to the PEPRA limits
On or after 1 /1 /13
Employees' Pension Reform
which, as indexed for 2025,
Act (PEP RA) limits which, as
is $186,096
indexed for 2024, is $181,734
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 $375,000, contributions will not be made on any amount over $350,000 in calendar year
2025, and his or her pension cannot exceed $350,000, 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.
January 14, 2025 Regular ADM IN Committee Meeting Agenda Packet - Page 21 of 66
Page 2 of 2
Strategic Plan Tie -In
GOAL TWO: Environmental Stewardship
Strategy 1 - Achieve compliance in all regulations
January 14, 2025 Regular ADMIN Committee Meeting Agenda Packet - Page 22 of 66