Effective January 1, 2020, the maximum annual benefit limit under IRC § 41S(b)(l)(A) for a defined benefit plan will be $230,000. The limitation applies to the calendar year.
The maximum salary used for calculating retirement benefits under Internal Revenue Code {IRC) § 401(a)(17) will be $285,000 for the fiscal year beginning July 1, 2020. As a reminder, the limitation for the current fiscal year, which began July 1, 2019, is $280,000.
The IRC § 401{a)(17) maximum salary limitation only applies to those employees hired on or after July 1, 1996. The Internal Revenue Service allowed public employee retirement systems, such as TRS, to grandfather in all employees hired before July 1, 1996 with no maximum salary limitations.
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View: Annual Earnable Compensation and Benefit Limitations Memo