Retirement Contribution Limits
Maximum Salary Reduction Summary for 2015
For calendar year 2015, the amount that may be tax-deferred to your retirement savings plan is $18,000 or your total annual compensation. If you are over 50 years old, or will reach age 50 during calendar year 2015, this amount increases to the lesser of $24,000 or your total annual compensation, due to the special catch-up provision of the Economic Growth and Tax Relief Reconciliation Act of 2001. These limits apply to all eligible employees.
If you wish to change the amount you are contributing to the Retirement Plan or the company in which your contribution is invested, you may do so online.
$265,000 Limit on Compensation
The annual amount of compensation that a retirement plan may take into account for calendar year 2015 contribution purposes is limited to $265,000.
2015 Integration Level for the Boston University 1987 Plan
For calendar year 2015, the integration level for the 1987 Boston University Basic Retirement Plan is $36,900. The integration level is calculated using the lesser of the increases in the Social Security Wage Base or the National Average Total Compensation, published by the Bureau of Labor Statistics. The Social Security Wage Base increased 2.9 % from 2013 to 2014, and the National Wage Average increased 1.59%. Therefore, the 2015 integration level increased to $36,900.
Tax laws limit the amount of before-tax and after-tax Roth contributions that you can make to this plan each calendar year. Under the current rules, these limits will not affect your ability to make the required employee contribution, 3% of base salary (or contributions under the grandfathered 1965 plan, if that formula applies to you).
Internal Revenue Service Code Section 415 also places a limit on the total amount that may be contributed by the University and by you (before-tax and after-tax Roth and any other after-tax contributions) in a calendar year. If the sum of your contributions and the University’s contributions exceed any of the limits, certain IRS-mandated reductions apply.
Lastly, matching contributions by the University are subject to the requirements of Internal Revenue Service Code Section 401(m). If these requirements are not satisfied, matching contributions for certain participants may have to be reduced. If the 401(m) limitation should affect you, any amounts that would be reduced or returned on your behalf will be returned to you, via mail, in the form of a check by your investment fund sponsor. This amount will be treated as taxable income and you will receive a Form 1099 for the tax year in which you receive the returned contributions from your investment fund sponsor, for tax filing purposes.
Note: Special rules and limits apply if, during a calendar year, you also participate in another plan maintained by a business you own or control. For example, if you have consulting or other self-employment income and participate in a self-employed plan to which you make contributions, the special rules may affect you. If this situation applies to you, consult a qualified tax professional for advice.
Human Resources can assist in calculating the limits that apply to you.