Each year the IRS adjusts the Section 415 limits in accordance with the rise in the cost-of-living index. Retirees, whose benefit payments are subject to the Section 415 limits, will have their retirement benefit increased in accordance with the revised limit associated with their age at retirement:

Updated limits applicable to buy-back of military time and the two years of additional service credit for Tiers I & II Career and Salary members.

The 415 limits apply:

• to the benefits of members who first joined their plan after 1989.

• to the benefits of members who joined their plan before 1990 only if they include the value of post October 14, 1987 plan enhancements.

Each year the IRS adjusts the 415 limit in accordance with the rise in the cost of living index. Retirees, whose benefit payments are subject to the 415 limits, will have their retirement benefit increased in accordance with the revised limit associated with their age at retirement.

The restrictions detailed here should only affect a small number of employees. For most pre-1990 members, the 415 limits will not apply because the amount of retirement allowance, including benefit enhancements, will not exceed the cap.

Example:

1. A pre-1990 member retires at age 55, is entitled to a pension of $85,000 annually and has purchased additional retirement service credit worth $3,000 annually, will receive a total annual benefit of $88,000. Since the total benefit is below the applicable limit of $98,563, retiree’s benefits will not be affected.
2. A pre-1990 member retires at age 55, is entitled to a pension of $93,000 annually and has purchased additional retirement service credit worth $6,000 annually, will receive a total annual benefit of $99,000. Since the value of the regular pension plus the additional credit of $6,000 exceeds the Section 415 limit of $98,563, the retiree’s annual payment would be reduced to $98,563.

Employees that qualify for retirement can refer to their Annual Estimated Benefit Statements provided by NYCERS or MaBSTOA to determine whether they may be affected by these limits. (These statements are generally mailed out yearly by NYCERS in the summer and MaBSTOA in the spring.)