4.02.00: IRS Reportable Compensation
The Internal Revenue Service (IRS) imposes a calendar year limit on reportable compensation for 401(a)(17) retirement plans. The limit applies to those employees who became members of this retirement system after October 1, 1996. ORS will provide updated figures here each year.
|Calendar Year||Reportable Compensation Limit|
There are additional reportable compensation limits related to salary increases. The retirement law, Public Act 300 of 1980, MCL 38.1303a(3)(f) states that compensation does not include:
Compensation in excess of an amount over the level of compensation reported for the preceding year except increases provided by the normal salary schedule for the current job classification. In cases where the current job classification in the reporting unit has less than three members, the normal salary schedule for the most nearly identical job classification in the reporting unit or in similar reporting units shall be used.
The school fiscal year for reportable compensation is defined as compensation reported between July 1 through June 30. Each reporting unit is responsible for ensuring that reported compensation is consistent with the appropriate normal salary schedule. Reported wages are subject to audit by ORS. In the event that excess wages have been reported, the reported wages and employer/ employee contributions will need to be adjusted to reflect allowable amounts. See section 4.03.00: Normal Salary Increases.
Please note: reportable and nonreportable “compensation” is defined in MCL 38.1303a and only applies to active MPSERS members. For information on reporting earnings for retirees please see section 9.01: Earnings of Retirees Who Return to Work. 9.01: Earnings of Retirees Who Return to Work.
Last updated: 12/12/2019