Historic 415 Post-Separataion COLAs

[Guest HarveyC]

Is there a table of historic rates for section 415 post-separation COLAs? I believe the rate for 2001 was 1.0351 and 1999 was 1.0160. Also, how are these rates calculated? Presumably, these are simply CPI adjustments of some sort.

[MGB]

Note: These are only applicable to the 3-yr highest compensation limit under Section 415. All other automatic increases in other limitations are calculated from a base year which can result in different rounding.

The IRS publishes these with the same release in which they give the adjusted dollar limits. They have only been doing that for a few years, so the older ones here I probably calculated myself. They are the average of the Jul-Sep CPI-U divided by the same average from the year before.

1987-1988 4.47%

1988-1989 4.31%

1989-1990 4.60%

1990-1991 6.22%

1991-1992 2.99%

1992-1993 3.05%

1993-1994 2.72%

1994-1995 2.17%

1995-1996 2.64%

1996-1997 2.94%

1997-1998 2.20%

1998-1999 1.60%

1999-2000 2.35%

2000-2001 3.51%

2001-2002 2.70%

[Guest HarveyC]

Thanks much. Hadn't the CPI averaging period changed over time for this purpose or was it always Jul - Sep? Also, did the same apply prior to 1987?

[MGB]

I believe the changeover from 4th quarter occurred 1/1/94, so that the 93-94 numbers that I show go from 4th quarter 93 to 3rd quarter 94. I don't recall (without doing some digging) what the rule was prior to 87, but I imagine it was always 4th quarter to 4th quarter.

[Guest HarveyC]

Reg 1.415-5(B)(2) describes the annual adjustment factor for compensation limitation. The factor described here is the ratio of the current year's dollar limit over that for the prior year. However, the reg was adopted on 12/30/80 and hasn't been amended since. It seems that when TEFRA reduced the dollar limit from $136,425 for 1982 to $90,000 for 1983, the procedure outlined in 1.415-5(B)(2) no longer applied. It appears that since that time, the CPI-U rates that are used to determine increases, if any, in the dollar limit are applied to determine post-separation COLAs for those initially limited by the 100% compensation limitation. Are my facts/assertions correct?