The latest amendments to the Puerto Rico Act 9 includes changes to the Trust Act of 2012 that affect certain pension plan limits that apply to Puerto Rican defined contribution plans – i.e. 401(k), 403(b), etc.  Prior to the new act, the U.S. federal limits applied to these plans.   

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Amendments to Puerto Rico Code Include Changes to Pension Plan Limits

Mar 1, 2017

Background and Details of the Change:

The latest amendments to the Puerto Rico Act 9 includes changes to the Trust Act of 2012 that affect certain pension plan limits that apply to Puerto Rican defined contribution plans – i.e. 401(k), 403(b), etc.  Prior to the new act, the U.S. federal limits applied to these plans. 

The following limits have changed:

  • The limit on annual additions to defined contribution plans increases to the lesser of $75,000 or 25 percent of “net income” (The 2017 U.S. federal limit is $54,000). Note: the amendment does not define “net income”.
  • The limitation used in the definition of "highly compensated employee" increases to $150,000 (The 2017 U.S. federal limit is $120,000).

General Impact to Employers:

Employers are currently awaiting additional guidance, definitions and clarifications from the Puerto Rico Treasury..

For more information, please reference:

Puerto Rico Act 9*, Trust Act of 2012* and the Puerto Rico Internal Revenue Code of 2011