In this blog post, we discuss important updates, including upcoming deadlines, with respect to employee benefits impacting plan sponsors.
Puerto Rico Treasury Announces 2015 Limits on Retirement Plans
The Puerto Rico Department of the Treasury ("PR Treasury"), the equivalent to the Internal Revenue Service (IRS) in the United States, on a yearly basis is required to issue a notification of the limits on retirement plans that will apply in Puerto Rico during the following taxable year. On December 15, 2014, the PR Treasury published Tax Policy Circular Letter 14-05 ("CL 14-05"), announcing the limits applicable to Puerto Rico for 2015, including the limits that are incorporated into the Puerto Rico Internal Revenue Code ("PR Code") from the U.S. Internal Revenue Code ("US Code").
A summary of the 2015 pension limits applicable to Puerto Rico is as follows:
Annual Benefit Limit on Defined Benefit Plans: $210,00 (remained unchanged) Annual Contribution Limit on Defined Contribution Plans: $53,000 (increased from $52,000 for 2014) Annual Compensation Limit: $265,000 (increased from $260,000 for 2014) Compensation for Highly Compensated Employee Limit: $120,000 (increased from $115,00 for 2014) Elective Deferrals Limit on Dual Qualified Plan or Federal Government Employees Participants: $18,000 (increased from $115,000 for 2014) Catch-up Contributions Limit on Federal Government Employees (aged 50 or older): $6,000 (increased from $5,500 for 2014) Elective Deferrals Limit on Puerto Rico Only Qualified Plans Participants: $15,000 (remained unchanged) Catch-up Contributions Limit on Plan Not sponsored by the Federal Government Participants (aged 50 or older): $1,500 (remained unchanged) After-Tax Contribution Limit: 10% of the aggregate compensation of the employees for all years in which they are participants in a retirement plan (remained unchanged) See our February 19, 2014 edition of Employee Benefits Notes summarizing the 2014 pension limits and other relevant updates.
Senate Bill P.S. 1189 Seeks to Extend Window Period to Pre-Pay at a Reduced Rate the Tax Amounts Accumulated under a Retirement Plan
Act 77 of July 1, 2014 ("Act 77") provided a period during which participants in retirements plans could pre-pay, at a reduced tax rate, the amounts accumulated under such plans. The window period covered from July 1, 2014 through October 31, 2014. Senate Bill 1189 seeks to extend the window period until January 31, 2014.