Internal Revenue Code Section 415(b) limits the annual dollar amount that the Pension Plan can pay to a Participant. The IRC 415(b) Limit is based on several factors, including the Participant’s age when the Participant begins receiving Pension Plan benefits. The Internal Revenue Service (“IRS”) periodically makes cost-of-living adjustments to the IRC 415(b) Limit.
Internal Revenue Code Section 401(a)(17) limits the annual dollar amount of compensation that the Pension Plan (a Private Plan) can use to determine a Participant’s Pension Plan benefit. A more generous IRC 401(a)(17) Limit [based on the 401(a)(17) limit in effect on July 1, 1993, as adjusted for cost-of-living] applies to certain Governmental Plans such as the University of California Retirement Plan. The IRS periodically makes cost-of-living adjustments to the IRC 401(a)(17) Limit for Private Plans and for Governmental Plans.
| Calendar Year | IRC 415(b)(1)(a) Annual Benefits Payment Limit (at Age 62 [1,2]) | IRC 401(a)(17) Annual Compensation Limit [3] | |
|---|---|---|---|
| 2020 | $230,000 | $285,000 | |
| 2021 | $230,000 | $290,000 | |
| 2022 | $245,000 | $305,000 | |
Notes:
- The limit is age-adjusted for retirement date prior to age 62.
- LLNS Restoration Plan provides relief (see Restoration Plan for details).
- Impacts calculation of the HAPC for certain high-earners with salaries above this amount (contact the Benefits Office for more information).
