For applications submitted to conform to the 2020 RA List

Employee

Benefit

Plans

Explanation No. 6

Limitations on 

Contributions 

and Benefits 

Note:

Plans submitted during the 2020 Required Amendment List 

submission period must satisfy the applicable changes in 

plan qualification requirements listed in Section IV of Notice 

2020-83, 2020-50 I.R.B. 1597 (the 2020 RA List).

Item I.d. in this publication does not apply to submissions 

made prior to the 2020 Required Amendment List submission 

period.

This publication contains copies of:

Form 8384, Worksheet 6 

Form 6044, Deficiency Checksheet 6

These forms are included as examples only and should not 

be completed and returned to the Internal Revenue Service.

Publication 7001 (Rev. 6-2021) Catalog Number 48250U Department of the Treasury Internal Revenue Service www.irs.gov

The technical principles in this publication may be changed by 

future regulations or guidelines.

The purpose of Form 8384, Worksheet Number 6, is to assist in 

determining if a plan meets the major requirements of §415. However, 

there may be §415 issues not mentioned in the worksheet that could 

affect the plan’s qualification. 

Generally, a “Yes” answer to a question on the worksheet indicates a 

favorable conclusion while a “No” answer signals a problem concerning 

plan qualification. This rule may be altered by specific instructions for 

a given question. Please explain any “No” answer in the “Comments” 

section of the worksheet. 

In order for a plan to qualify, it must preclude the possibility that the 

§415 limitations will be exceeded; that is, the plan must preclude the 

possibility that annual additions (under a defined contribution plan) or 

distributions (under a defined benefit plan) will exceed the limitations. 

Also, a defined benefit plan (other than a plan that is not subject to the 

requirements of §411, such as a governmental or nonelecting church 

plan) must preclude the possibility that an accrual will exceed the 

§415 limitations. However, no specific plan language is prescribed to 

comply with §415. For example, if Plan X, which is a money purchase 

plan, has (1) a contribution formula of 100 percent of compensation 

actually paid or made available, as defined in §1.415(c)-2 of the 

regulations, or $40,000 (as adjusted under §415(d)), whichever is 

less; (2) does not allow employee contributions; (3) allocates employer 

contributions every year; and (4) uses all forfeitures to reduce employer 

contributions, then no other provisions are necessary with respect to 

§415 as long as Plan X is the only plan maintained, or that has ever 

been maintained, by the employer.

A plan will not fail to meet the definitely determinable benefit or definite 

predetermined allocation formula requirement merely because 

it incorporates the limitations of §415 by reference. However, if 

a limitation of §415 may be applied in more than one manner, the 

plan must specify the manner in which the limitation is to be applied 

instead of incorporating the limitation by reference, unless a statutory 

or regulatory default rule exists. If a default rule exists, in order to 

deviate from the default rule the plan must specify the manner in 

which the limitation is to be applied, as well as generally incorporating 

the limitations of §415 by reference. See IRM Exhibit 7.11.1-3, Code 

Sections which may be Incorporated by Reference.

This explanation reflects changes to the limitations of §415 made 

by the Economic Growth and Tax Relief Reconciliation Act of 2001 

(EGTRRA), the Pension Funding Equity Act of 2004 (PFEA ‘04), the 

Pension Protection Act of 2006 (PPA ‘06), the Worker, Retiree, and 

Employer Recovery Act of 2008 (WRERA) and the final regulations 

under §415. The final regulations under §415 generally apply for 

limitation years beginning on or after July 1, 2007, that is, for calendar 

year limitation years, the 2008 limitation year. A special grandfather 

rule discussed later in this explanation applies to defined benefit plans. 

The sections cited at the end of each line explanation are to the 

Internal Revenue Code and the Income Tax Regulations, unless 

otherwise specified. 
Page 2 For applications submitted to conform to the 2020 RA List

I. General Definitions

Line a. If the plan does not define the limitation year, it is deemed to use the calendar year and this question should be answered “N/A”. 

A different 12-month period may be designated in the plan or an amendment to the plan. Any change to the limitation year may only be 

made through an amendment to the plan and only to a 12-month period commencing within the current limitation year. This will create a 

short limitation year which must be separately tested for §415 purposes. If the plan is a defined contribution plan, and the limitation year is 

changed, the dollar limitation with respect to the short limitation year is determined by multiplying (A) the applicable dollar limitation for the 

calendar year in which the short limitation year ends by (B) a fraction, the numerator of which is the number of months (including fractional 

months) in the short limitation year, and the denominator of which is twelve (see Explanation No. 6 line II.b). In general, the compensation 

limitation would be determined by considering only the compensation paid or made available during the short limitation year. If a defined 

contribution plan is terminated, this also creates a short limitation year requiring the same adjustments of the limitations. A defined benefit 

plan does not have to make any special adjustments to the dollar limitation for a short limitation year with regard to the accrual of benefits.

If the employer (or the controlled group, if applicable) maintains multiple defined contribution plans with different limitation years, each 

plan must satisfy the limitations in effect for that plan for that plan’s limitation year taking into account the participant’s annual additions 

under the plan as well as the participant’s annual additions under all the other plans required to be aggregated with the plan that would be 

counted under the plan for the limitation year if they had been credited under the plan. If the employer (or the controlled group, if applicable) 

maintains multiple defined benefit plans with different limitation years, each plan must satisfy the limitations in effect for that plan for that 

plan’s limitation year taking into account the participant’s annual benefit under all the plans required to be aggregated. See II.e. and III.k., 

below.

1.415(j)-1 

Line b. Section 415 (c)(3) compensation is required for purposes of applying the limitations of §415. The following items are includable 

in compensation for purposes of §415: (a) wages, salaries, fees for professional services and other amounts received (whether or not in 

cash) for personal services actually rendered in the course of employment with an employer maintaining the plan to the extent includible 

in gross income (including but not limited to commissions paid salesmen, compensation for service on the basis of a percentage of profits, 

commissions on insurance premiums, tips, bonuses, fringe benefits, and reimbursements or expense allowances under a nonaccountable 

plan (as described in Regs. §1.62-2(c); (b) earned income (with respect to employees within the meaning of §401(c)(1)); (c) amounts 

described in §§104(a)(3), 105(a) and 105(h) but only to the extent they are includible in the employee’s gross income; (d) amounts paid or 

reimbursed by the employer for moving expenses incurred by the employee to the extent that such amounts are not deductible under §217; 

(e) the value of a nonstatutory option (i.e., an option not described in §1.421-1(b)) granted to an employee by the employer to the extent 

the value is includible in the employee’s gross income; (f) the amount includible in the employee’s gross income upon making the election 

in §83(b); (g) amounts includible in gross income under §409A or §457(f)(1)(A) or because of constructive receipt, and (h) differential wage 

payments as defined in §3401(h)(2) for years beginning after December 31, 2008. 

For purposes of (a) and (b) above in this Line b., compensation includes foreign earned income (as defined in §911(b)), whether or not 

excludable from gross income under §911. Compensation under (a) and (b) above is also to be determined without regard to the exclusions 

from gross income in §§872, 893, 894, 931 and 933. A plan may provide that compensation that is excludable from gross income under 

the aforementioned sections and that is not effectively connected with a trade or business in the U.S. will not be treated as compensation 

with respect to nonresident aliens who do not participate in the plan, provided the rule applies uniformly. (This is a rule of administrative 

convenience that is relevant in the determination of who is a key employee for purposes of the top-heavy rules of §416 and who is a highly 

compensated employee within the meaning of §414(q)).

The following items are excludable from compensation for purposes of §415: (a) contributions (other than elective contributions described 

in §§402(e)(3), 408(k)(6), 408(p)(2)(A)(i), or §457(b)) made by the employer to a plan of deferred compensation (including a simplified 

employee pension described in §408(k) or a simple retirement account described in §408(p), and whether or not qualified) to the extent 

that the contributions are not includible in the gross income of the employee for the taxable year in which contributed; (b) distributions from 

a plan of deferred compensation (whether or not qualified), except, a plan may provide that distributions from an unfunded nonqualified 

plan are included for §415 when the distributions are includible in income; (c) amounts realized from the exercise of a nonstatutory option, 

or when restricted stock (or property) held by an employee either becomes freely transferable or is no longer subject to a substantial risk 

of forfeiture; (d) amounts realized from the sale, exchange or other disposition of stock acquired under a statutory stock option (as defined 

in §1.421-1(b)); (e) other amounts which receive special tax benefits, such as premiums for group term life insurance (to the extent the 

premiums are not includible and are not salary reduction amounts under §125); and (f) other items of remuneration similar to (a) through (e).

Compensation, for §415 purposes, includes any amount which is contributed or deferred by the employer at the election of the employee 

and which is not includible in the gross income of the employee by reason of §§125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k) or 457(b). 

A plan may provide that amounts under §125 include any amounts excludable under §106 that are not available to a participant in cash 

in lieu of group health coverage because the participant is unable to certify that he or she has other health coverage (deemed §125 

compensation). An amount will be treated as an amount under §125 only if the employer does not request or collect information regarding 

the participant’s other health coverage as part of the enrollment process for the health plan. 

The plan may adopt a safe harbor definition of §415 compensation by using either simplified compensation, §3401(a) wages, or income 

reported under §6041, §6051 and §6052.

The safe harbor definition under “simplified compensation” includes only those items specified as includable under (a), (b), and (h) of the 

first paragraph of this Line b and excludes all those items listed as “excludable.” See above.
Page 3 For applications submitted to conform to the 2020 RA List

The safe harbor definition under “§3401(a) wages” includes wages within the meaning of §3401(a) (for purposes of income tax withholding 

at the source), plus amounts that would be included in wages but for an election under §§125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k), 

or 457(b). 

The safe harbor definition under “Information required to be reported under §§6041, 6051 and 6052”. includes “§3401(a) wages plus all 

other payments of compensation to an employee by his employer (in the course of the employer’s trade or business) for which the employer 

is required to furnish the employee a written statement under §§6041(d), 6051(a)(3), and 6052. This safe harbor definition of compensation 

may be modified to exclude amounts paid or reimbursed by the employer for moving expenses incurred by an employee, but only to the 

extent that, at the time of the payment, it is reasonable to believe that these amounts are deductible by the employee under §217.

The plan may also use its §415 definition of compensation to determine its benefit formula or contribution rate. Regardless of what definition 

of compensation the plan uses for other purposes, to answer this question “Yes” the definition of compensation used to apply the §415 

limitations must preclude the possibility that these limitations will be exceeded. Therefore, if the plan does not use a safe harbor definition 

of compensation described above in applying the §415 limitations but instead uses a definition of compensation that may include one of 

the exclusions stated in the regulatory definition, the plan fails to meet this requirement. On the other hand, a plan does not fail to meet this 

requirement merely because it fails to include in its definition of compensation some of the items mentioned above. 

Except as provided below, in determining compensation for the limitation year, the plan must use compensation actually paid or made 

available (or, if earlier, includible in gross income) in such year. The plan may provide that compensation also includes amounts earned 

but not paid in a year because of the timing of pay periods if the amounts are paid in the first few weeks of the next year, the amounts are 

included uniformly and consistently for similarly situated employees, and amounts are not included in more than one limitation year.

As a general rule, post-severance compensation paid in a limitation year may not be treated as §415 compensation unless it is paid (or 

treated as paid) prior to the employee’s severance from employment. However, §1.415(c)-2(e)(3)(i) and (ii) of the regulations, effective July 

1, 2007, requires certain post-severance compensation to be included as §415 compensation while other post-severance compensation 

may optionally be included if the plan so provides. Post-severance compensation must be included if (a) the compensation is paid by the 

later of (1) 2 1⁄2 months after severance from employment, or (2) the end of the limitation year that includes the date of severance from 

employment; and (b) absent a severance from employment, the compensation would have been paid to the employee while the employee 

continued in employment with the employer as regular compensation for services rendered during the employee’s regular working hours or 

as compensation for services outside the employee’s regular working hours (such as overtime or shift differential), commissions, bonuses 

or other similar compensation. A plan may optionally provide that compensation for purposes of §415 also includes post-severance 

compensation that is paid by the later of (1) 2 1⁄2 months after an employee’s severance from employment or (2) the end of the limitation 

year that includes the date of the employee’s severance from employment if (a) the payment is for unused accrued bona fide sick, vacation 

or other leave that the employee would have been able to use if employment had continued; or (b) the payment is received by the employee 

pursuant to a nonqualified unfunded deferred compensation plan and would have been paid at the same time if employment had continued, 

but only to the extent includible in gross income.

Any payments not described above are not considered compensation if paid after severance from employment (even if they are paid by 

the later of 2 1⁄2 months following severance from employment or the end of the limitation year that includes the date of severance) except 

for salary continuation payments to a participant who is permanently and totally disabled within the meaning of §22(e)(3), provided the 

participant was not highly compensated immediately before becoming disabled or salary continuation applies to all participants who are 

permanently and totally disabled for a fixed or determinable period. 

Back pay is treated as compensation for the limitation year to which the back pay relates to the extent the back pay represents wages and 

other compensation that would be includible in compensation for purposes of §415. 

For limitation years beginning on or after July 1, 2007, a plan’s definition of compensation for a year that is used for purposes of §415 may 

not reflect compensation for a year greater than the limit under §401(a)(17) that applies to that year. 

If an employee is employed by two or more members of a controlled group of corporations, compensation for such employee includes 

compensation from all the employers in the controlled group whether or not they maintain the plan. This also applies to compensation from 

two or more members of commonly controlled trades or businesses and affiliated service groups. 

In the case of an annuity contract described in §403(b) the term “participant’s compensation” for purposes of §415 means includible 

compensation determined under §403(b). If a §403(b) annuity contract is aggregated with a qualified plan maintained by an employer that is 

controlled by a participant on whose behalf the contract was purchased, the total compensation from both employers is taken into account 

in applying the limitations of Part II of this explanation to the plan and contract on an aggregate basis.

415(c)(3) 

1.415(c)-2 

Line c. For plans that are sponsored by Indian tribal governments, effective for taxable years ending on or after November 15, 2013, 

proposed regulations clarify that compensation received by Indian tribal members for services rendered in performed certain fishing rightsrelated activities may be treated as compensation for purposes of applying §415 limitations, even though these payments might otherwise 

be excludible from gross income. Various Federal statutes, treaties, executive orders regulate Indian tribal rights the right to conduct fishing 

activities, both on and off reservations, and income derived from these activities is exempt from income and employment taxes. These 

regulations clarify that exemption notwithstanding, fishing rights-related income is included in §415 compensation, and amounts may be 
Page 4 For applications submitted to conform to the 2020 RA List

contributed to a qualified retirement plan based on this income as a “pensionable” source. (This clarification was necessary because as 

fishing rights-related income is not subject to income or employment taxes, there had been questions as to whether this income is included 

as compensation for §415 purposes.)

Under these regulations, Fishing rights-related activity with respect to Indian tribes includes any activity directly related to (a) harvesting, 

processing or transporting fish harvested in the exercise of a recognized fishing right of the tribe; or (b) selling such fish but only if 

substantially all of such harvesting was performed by members of such tribe.

Prop. Reg. 1.415(c)–2(g)(9)

Line d. For defined contribution plans, Section 116(b) of the Setting Every Community Up for Retirement Enhancement Act of 2019 

(SECURE Act) added § 415(c)(8) to the Code to increase the annual additions limit to take into account difficulty of care payments, which 

are defined in § 131(c). A difficulty of care payment is a type of qualified foster care payment that is excludable from gross income under § 

131. Because a difficulty of care payment is excludable from gross income, it was not, prior to the SECURE Act, included in a participant’s 

compensation for purposes of calculating the annual additions limit of § 415(c)(1). Accordingly, an employee who received difficulty of care 

payments from an employer was not permitted to make contributions to, or receive allocations under, the employer’s plan based on the 

difficulty of care payments.

Section 415(c)(8)(A) provides that a participant’s compensation for purposes of § 415(c)(1) is increased by the amount of difficulty of 

care payments. Plans that are maintained by employers that have provided difficulty of care payments during plan years beginning after 

December 31, 2015, and before January 1, 2021, must be amended by December 31, 2022 or, if later, the SECURE Act section 601 date 

applicable to the plan, as set forth in section G of Notice 2020-68. If an employer changes its practice and begins to make difficulty of care 

payments to its employees in future years, the plan must be amended to include difficulty of care payments in the definition of § 415(c)(1) 

compensation by the end of the second calendar year following the calendar year in which the employer begins to make difficulty of care 

payments.

Note: See also section E of Notice 2020-68, which provides questions and answers related to SECURE Act section 116.

Note: This change also applies to IRAs, but only prospectively effective as of date of enactment, contrary to the retroactivity provided for 

defined contribution plans.

II. Limitations On Contributions 

Line a. Annual additions include (a) employer contributions, (b) employee contributions, and (c) forfeitures credited to a participant’s 

account for any limitation year. Elective contributions and employee and matching contributions subject to the requirements of §401(m) 

are annual additions regardless of whether they result in excess aggregate contributions, even if such excesses are corrected through 

distribution or recharacterization. Catch-up contributions under §414(v), on the other hand, are not annual additions. Excess deferrals 

that are distributed in accordance with Regs. §1.402(g)-1(e)(2) or (3) also are not annual additions. Amounts allocated to an individual 

medical account, as defined in §415(l)(2), which is part of a pension or annuity plan maintained by the employer, and amounts attributable 

to post-retirement medical benefits allocated to the account of a key employee, as defined in §419A(d)(3), under a welfare benefit fund, as 

defined in §419(e), maintained by the employer are treated as annual additions to a defined contribution plan. However, the percentage of 

compensation limitation described in line II.b. does not apply to such amounts. Annual additions under a §403(b) annuity contract are also 

treated as annual additions to a defined contribution plan.

Repayment by an employee of a cash-out or previously withdrawn mandatory contributions which result in the restoration of amounts 

that were forfeited because of these distributions are not annual additions. Similarly, transfers of employer or employee contributions 

from another qualified plan, repayments of loans, or rollovers accepted by the plan are not annual additions. Also, payments made to 

restore losses to a plan resulting from actions by a fiduciary for which there is a reasonable risk of liability under Title I of ERISA or under 

other federal or state law are not annual additions if similarly situated plan participants are treated similarly with respect to payments. 

The regulations describe other amounts which are not annual additions and some amounts which are considered annual additions for 

limitation years other than the limitation year in which actually credited to the participant’s account. These regulations should be consulted 

to determine whether the plan correctly treats such amounts as annual additions. Generally, amounts are credited to a participant’s account 

if they are allocated to the account under the terms of the plan as of any date within the limitation year unless such allocation is dependent 

upon participation in the plan as of any time after such allocation date.

415(c);

415(l);

419A(d)(2) and (3);

419(e)

1.415(c)-1

Line b. A defined contribution plan must preclude the possibility that annual additions credited to any participant’s account in a limitation 

year will exceed the limitations of §415. For limitation years beginning after December 31, 2001, the limitation is the lesser of $40,000 or 

100% of compensation. The $40,000 figure will be adjusted annually by the Secretary for increases in the cost of living, with references 

to quarters and base periods, independently of the defined benefit dollar limit. Any adjustments will be in $1000 increments. A defined 

contribution plan may provide for an automatic increase in the dollar limitation to reflect cost-of-living increases but is not required to do so. 
Page 5 For applications submitted to conform to the 2020 RA List

A new plan may use the dollar limitation in effect for its first limitation year and adjust the limit from that point. For limitation years beginning 

on or after July 1, 2007, a plan’s definition of compensation for a year that is used for purposes of §415 may not reflect compensation for a 

year greater than the limit under §401(a)(17) that applies to that year.

Alternative limits apply to annual additions under a §403(b) annuity contract for a participant who is an employee of a church or a convention 

or association of churches. These alternative limits permit minimum annual additions of up to $10,000 for a limitation year, not to exceed 

$40,000 for all limitation years, regardless of the general limits. A separate rule permits a $3,000 minimum annual addition for church 

employees who are foreign missionaries and whose adjusted gross income does not exceed $17,000. The regulations should be consulted 

regarding the interaction of these two minimums. 

If you are reviewing a defined benefit plan that provides for employee contributions (whether mandatory or voluntary), such employee 

contributions are treated as a separate defined contribution plan for §415 purposes. Therefore, such employee contributions must comply 

with this limitation requirement. 

415(c)(1);

415(d)(1);

415(d)(3);

415(d)(4);

1.415(c)-1 

Line c. The regulations under §415 that were in effect for limitation years beginning before July 1, 2007 (the 1981 regulations) set forth 

permitted correction methods for excess annual additions that arose under certain circumstances. See II.c. of the version of this explanation, 

rev. 3-2006, for an explanation of the correction methods. The correction methods under the 1981 regulations have been deleted in the 

final regulations, effective for limitation years beginning on or after July 1, 2007. Correction of excess annual additions is generally only 

permitted under the Employee Plans Compliance Resolution System (EPCRS) under Rev. Proc. 2019-19, 2019-19 I.R.B. 1086. If the plan 

contains the correction methods of the 1981 regulations, the plan must limit the application of the methods to limitation years beginning 

before July 1, 2007. 

Preamble to Final §415 Regulations; 

Rev. Proc. 2008-50 

Line d. A defined contribution plan may provide for contributions on behalf of a participant who has become permanently and totally 

disabled (as defined in §22(e)(3)) even though the participant has no actual compensation. In such cases, the disabled participant is 

deemed to have compensation each year equal to the rate of compensation paid immediately before the participant became permanently 

and totally disabled, if greater than the disabled participant’s actual compensation for the year. 

A plan may either provide for the continuation of contributions on behalf of all permanently and totally disabled participants (as defined in 

§22(e)(3)) for a fixed or determinable period or provide for the continuation of contributions only for those employees who were nonhighly 

compensated when they became disabled.

Contributions made with respect to the imputed compensation of a disabled participant must be nonforfeitable when made. 

Note that this imputed compensation rule for disabled participants is separate from the salary continuation rule for disabled participants 

described in line b above.

415(c)(3)(C);

1.415(c)-2(g)(4)

Line e. The sum of the annual additions credited to a participant’s account in any limitation year for all of the qualified defined contribution 

plans of the employer or a predecessor employer (which, for this purpose, include plans qualified under §401(a), annuity plans described 

in §403(a), and simplified employee pensions described in §408(k)), regardless of whether a plan is terminated, may not exceed the 

limitations of §415(c). See line III.g. for the definition of predecessor employer.

A qualified defined contribution plan maintained by any member of a controlled group of corporations or commonly controlled trades or 

businesses (as defined in §414(b) and (c) as modified by §415(h)) or any member of an affiliated service group (as defined in §414(m)), is 

considered maintained by all of the members for this purpose. 

There are two exceptions to the foregoing plan aggregation rules that pertain to multiemployer plans, as defined in §414(f). First, multiemployer 

plans are not aggregated with other multiemployer plans for purposes of §415. Second, if the employer maintains a multiemployer plan and 

that plan so provides, only the benefits (i.e., annual additions) under the multiemployer plan that are provided by the employer are treated 

as benefits (annual additions) provided under the employer’s plans that are not multiemployer plans.

A qualified defined benefit plan maintained by the employer to which employee contributions are made is considered a separate defined 

contribution plan for this purpose to the extent such employee contributions constitute annual additions in the limitation year. Also, employer 

contributions allocated to (1) an individual medical benefit account maintained under a pension or annuity plan or (2) the account of a key 

employee under a welfare benefit trust described in §419(e) to provide post-retirement medical benefits are treated as annual additions to 

a defined contribution plan. 
Page 6 For applications submitted to conform to the 2020 RA List

The provisions of the plans must preclude the possibility that the total annual additions allocated to any participant in all such plans will 

exceed these limitations in any limitation year whether the §415 limitations are incorporated by reference. Note that if the plans cannot have 

common participants, this requirement is satisfied. 

A money purchase plan may provide for the automatic freezing or reduction of contributions to ensure the limitations of §415 are met 

without violating the requirement that benefits be definitely determinable if the plan provision precludes employer discretion. 

A profit-sharing or stock bonus plan may also contain a provision for the automatic freezing or reduction of contributions without violating 

the definite predetermined allocation formula requirement if the plan provision precludes employer discretion. For example, if two defined 

contribution plans of one employer would otherwise provide for aggregate contributions exceeding the limitations of §415(c), the plan 

provisions must specify, without involving employer discretion, which plan will reduce contributions and allocations to prevent an excess 

annual addition and how the reduction will occur.

A §403(b) annuity contract is considered a plan maintained by the employee and must be aggregated when the employee is in control of 

the employer. Effective for limitation years beginning after December 31, 2001, the special election for §403(b) annuity contracts purchased 

by educational organizations, hospitals, home health service agencies and certain churches is eliminated.

Also see line III.g. for additional special rules that may also apply to defined contribution plans.

415(f)(1)

415(k)(4)

1.401(a)-1(b)(1)(ii) and (iii); 1.415(a)-1(d); 1.415(c)-1; 1.415(f)-1

III. Limitations On Benefits - General Rule

(Note: This explanation, including this Part III, reflects the requirements of the final regulations under §415 that are effective for limitation 

years beginning on or after July 1, 2007. A defined benefit plan is considered to satisfy the limitations of §415(b) with respect to benefits 

accrued or payable under the plan as of the end of the last limitation year beginning before July 1, 2007 under plan provisions (including 

a plan’s limitation year) that were adopted and in effect before April 5, 2007. This grandfather rule is available only if the plan provisions 

adopted and in effect on April 5, 2007 satisfied the requirements of §415 and related published guidance in effect before the final regulations. 

See the revision of this explanation, rev. 3-2006, for an explanation of the prior guidance. A plan is not ineligible for the grandfather rule 

because the plan has not yet been amended for the changes to §415(b) made by PFEA ‘04 and PPA ‘06 or because the plan considered 

compensation in excess of the §401(a)(17) limit in applying the compensation limit described in line III.a. for limitation years before the final 

regulation effective date. See line III.b. For a participant with grandfathered benefits, additional benefits cannot accrue after the effective 

date (limitation years beginning on or after July 1, 2007) of the final regulations unless and until the sum of such additional benefits and the 

participant’s grandfathered benefits satisfies the requirements of the final regulations.

Section 415(b)(2)(E)(v) of the Code was amended by §103(b)(2)(B)(i) of the WRERA, providing that the mortality table used for adjusting 

limitations (form adjustments or age adjustments) on defined benefit plans shall be the applicable mortality table within the meaning of 

§417(e)(3)(B) of the Code, which is based on mortality table under §430((h)(3)(A).

Line a. The maximum annual benefit to which any participant may be entitled during the limitation year may not exceed the lesser of 

$160,000 (effective for the first limitation year ending after December 31, 2001) or 100 percent of the participant’s average compensation 

for the three consecutive calendar years of employment (or lesser period if the employee does not have three consecutive years) which 

produce the greatest aggregate compensation. The percentage of compensation limit does not apply, however, to a governmental plan 

as defined in §414(d), a multiemployer plan as defined in §414(f), a collectively bargained plan that is described in §415(b)(7), or to a 

participant in a plan maintained by a church described in §3121(w)(3)(A) who has never been a §414(q) highly compensated employee of 

the church. 

A different 12-month period may be used if uniformly and consistently applied in a manner specified in the plan. For a participant who 

has had a severance from employment and is then rehired, the years for which the participant performed no service and received no 

compensation are ignored, and the years immediately preceding and following this break period are treated as consecutive. 

The annual benefit is a benefit payable annually as a straight life annuity. The benefits attributable to employee contributions and rollover 

contributions are not taken into account for purposes of this limitation. Social security supplements and benefits transferred from another 

defined benefit plan, other than an elective transfer of a participant’s distributable benefits, are taken into account.

The dollar limitation and the compensation limitation will be adjusted annually by the Commissioner to reflect the increase in the cost-ofliving. The increased limits apply to any limitation year ending with or within the calendar year for which the increase is effective, but a 

participant’s benefits may not reflect the adjustment prior to January 1 of that calendar year.

A plan may provide for automatic increases in the dollar and compensation limitations by incorporating by reference the annual adjustments 

under §415(d). However, if a plan incorporates the adjustments by reference, the annual adjustment to the dollar limitation will not apply 

to a participant after a severance from employment, unless the plan so specifies. Likewise, the annual adjustment to the compensation 

limitation, which applies only after a participant’s severance from employment, will not apply unless the plan so specifies. Instead of 

automatically incorporating the cost-of-living adjustments by reference, a plan may be amended from time to time to take into account these 

increases. The regulations provide two safe harbors that allow distributions that are increased pursuant to plan amendments to be treated 
Page 7 For applications submitted to conform to the 2020 RA List

as continuing to satisfy the limitations of §415(b). These safe harbor provisions of the regulations should be consulted when reviewing such 

a plan amendment. Finally, if a distribution option that is not subject to §417(e)(3), such as a QJSA, includes an automatic benefit increase 

feature which will never cause a distribution to exceed the limitations at the annuity starting date as increased by the subsequent annual 

adjustments, the increased benefit will continue to satisfy §415(b). If a plan contains a provision for cost-of-living increases other than one 

of those described above, the cost-of-living adjustments must be taken into account under the multiple annuity starting date rule explained 

below for purposes of satisfying the limitations of §415(b).

The plan provisions must preclude the possibility that an annual benefit in excess of this limitation will be accrued or become payable 

at any time. It is not enough that no participant has actually accrued a benefit in excess of this limitation. In addition, if a participant has 

distributions commencing at different times (i.e., multiple annuity starting dates), the limitations must be satisfied as of each annuity starting 

date, actuarially adjusting for past and future distributions. 

415(b)(1), 415(b)(3), and 415(d)(1)

1.415(a)-1(d)(3)(v), 1.415(b)-1(b), 1.415(b)-1(c)(5), 1.415(d)-1

Line b. For limitation years beginning on or after July 1, 2007, compensation for any 12-month period taken into account in determining 

average compensation for the high three years may not include compensation in excess of the limitation under §401(a)(17) for the calendar 

year in which the 12-month period begins. A participant’s high 3 years shall be the period of consecutive calendar years (not more than 3) 

during which the participant had the greatest aggregate compensation from the employer. 

Under the grandfather rule described in the note preceding the explanation for line III.a., a plan that previously considered compensation in 

excess of the §401(a)(17) limit in applying the compensation limitation of line III.a. preserves the benefit previously accrued for a participant.

401(a)(17), 1.415(b)-1(a)(5)(I), 1.415(c)-2(f) 

Line c. If a defined benefit plan provides a retirement benefit in any form other than a straight life annuity, the plan benefit must be adjusted 

to an actuarially equivalent straight life annuity beginning at the same age. If the form of benefit is a straight life annuity or a qualified joint 

and survivor annuity, no adjustments are necessary. Examples of benefits that are not in the form of a straight life annuity are an annuity 

with a post-retirement death benefit or a lump sum. 

In making these adjustments the following values are not taken into account: (1) the value of a qualified joint and survivor annuity to the 

extent such value exceeds the sum of (A) the value of a straight life annuity beginning on the same date and (B) the value of any postretirement death benefits payable even if the annuity was not in the qualified joint and survivor form; (2) the value of ancillary benefits not 

directly related to retirement benefits (such as pre- retirement disability and death benefits, and post- retirement medical benefits); and (3) 

the value of benefits which include an automatic benefit increase feature, provided the benefit form is not subject to the requirements of 

§417(e)(3), such as a QJSA, and the amount payable in any limitation year is limited to the limitations of §415 in effect at the annuity starting 

date as subsequently increased by the annual cost-of-living adjustments under the Code. Social Security supplements are directly related 

to retirement benefits and should be taken into account. 

The assumptions that are required to be used in adjusting the benefit depend on whether the benefit form is subject to the present value 

requirements of §417(e)(3) and when the payment commences. Benefits subject to §417(e)(3) include all forms except any annual benefit 

that (i) is nondecreasing for the life of the participant or, in the case of a QPSA, the life of the participant’s spouse; or (ii) decreases during 

the life of the participant merely because of (a) the death of the survivor annuitant (but only if the reduction is to a level not below 50% of 

the annual benefit payable before the death of the survivor annuitant) or (b) the cessation or reduction of Social Security supplements or 

qualified disability benefits (as defined in §411(a)(9)). 

Where the adjustment is based on the interest rate specified in the plan, the rate specified in the plan includes the rate used to derive factors 

specified in the plan. Of course, different interest rate assumptions may be specified to determine the actuarial equivalence of different 

forms of benefit under the plan, and in such cases, the rate specified in the plan means the rate applicable to that particular benefit form.

i) For limitation years beginning on or after July 1, 2007, the actuarially equivalent straight life annuity for purposes of applying the 

limit in Ill.a. to benefits that are not subject to §417(e)(3) is equal to the greater of the annual amount of the straight life annuity 

(if any) payable to the participant under the plan commencing at the same annuity starting date as the other benefit form, and 

the annual amount of the straight life annuity commencing at the same annuity starting date that has the same actuarial present 

value as the form of benefit payable computed using a 5 percent interest rate assumption and the applicable mortality table under 

§417(e)(3) (that is, the table in Rev. Rul. 2001-62). 

ii) For limitation years beginning before July 1, 2007, the actuarially equivalent straight life annuity for purposes of applying the limit in 

Ill.a. to benefits that are not subject to §417(e)(3) is equal to the annual amount of the straight life annuity commencing at the same 

annuity starting date that has the same actuarial present value as the participant’s form of benefit computed using whichever of the 

following produces the greater annual amount: (1) the interest rate and mortality table or other tabular factor specified in the plan 

for adjusting benefits in the same form as the participant’s benefit; and (2) a 5 percent interest rate assumption and the applicable 

mortality table. 
Page 8 For applications submitted to conform to the 2020 RA List

Line d. 

i) For plan benefits subject to §417(e)(3), if the annuity starting date is in a plan year beginning after 2005, the actuarially equivalent 

straight life annuity equals the annual amount of the straight life annuity commencing at the same annuity starting date that has 

the same actuarial present value as the form of benefit payable, using whichever of the following produces the greatest annual 

amount: (1) the interest rate and the mortality table or other tabular factor specified in the plan for adjusting benefits in the same 

form; (2) a 5.5 percent interest rate assumption and the applicable mortality table; and (3) the applicable interest rate under 

§417(e)(3) and the applicable mortality table, divided by 1.05.

ii) For plan benefits subject to §417(e)(3), if the annuity starting date is in a plan year beginning in 2004 or 2005, the actuarially 

equivalent straight life annuity equals the annual amount of the straight life annuity commencing at the same annuity starting date 

that has the same actuarial present value as the form of benefit payable, using whichever of the following produces the greater 

annual amount: (1) the interest rate and mortality table or other tabular factor specified in the plan for adjusting benefits in the 

same form; and (2) 5.5 percent interest and the applicable mortality table.

iii) For plan benefits subject to §417(e)(3), if the annuity starting date is on or after the first day of the first plan year beginning in 

2004 and before December 31, 2004, the plan may apply the transition rule described in §101(d)(3) of PFEA ’04 in lieu of the 

rule described in the preceding paragraph to determine the amount of the participant’s benefit. The transition rule is explained in 

Notice 2004-78. Section 103(a) of WRERA changed the deadline to adopt PFEA’04 amendments from the end of the 2008 plan 

year to the end of the 2009 plan year.

415(b)(2)(B), 415(b)(2)(E) and 417(e)(3) 

1.415(b)-1(a), (b) and (c), 1.417(e)-1(d) 

Rev. Proc. 2008-62, 2008-2 C.B. 935,

Rev. Rul. 2001-62, 2001-2 C.B. 632

Notice 2004-78, 2004-2 C.B. 879

Reg. 1.430(h)(3)-1 

Line e. If a defined benefit plan provides a retirement benefit which begins before age 62, the dollar limitation determined under line Ill.a. 

must be adjusted (that is, reduced for early commencement). How the dollar limitation is adjusted for early commencement depends on 

whether the annuity starting date is in a limitation year beginning before July 1, 2007 or in a limitation year beginning on or after that date. If 

the annuity starting date is in a limitation year beginning on or after July 1, 2007, the adjustment that is required further depends on whether 

the plan offers an immediately commencing straight life annuity at both the age of benefit commencement and age 62. 

The adjustments described below for pre-62 benefit commencement take into account mortality in determining actuarial equivalence. 

However, to the extent the plan does not forfeit benefits upon the participant’s death before the annuity starting date, the plan does not 

have to take into account the mortality decrement for the probability of death between the annuity starting date and age 62 in determining 

actuarial equivalence for purposes of the age adjustments. If the plan does not charge participants for providing a qualified preretirement 

survivor annuity, the plan is treated as not forfeiting benefits on death.

i) If the annuity starting date is before age 62 and occurs in a limitation year beginning before July 1, 2007, the adjusted dollar 

limitation is the annual amount of a benefit payable in the form of a straight life annuity commencing at the participant’s annuity 

starting date that is the actuarial equivalent of the dollar limitation determined under line III.a. For purposes of this adjustment, 

actuarial equivalence is computed using whichever of the following produces the smaller annual amount: (1) the interest rate and 

mortality table or other tabular factor specified in the plan for determining actuarial equivalence for early retirement purposes; or 

(2) a 5 percent interest rate assumption and the applicable mortality table.

ii) If the annuity starting date is before age 62 and occurs in a limitation year beginning on or after July 1, 2007, and the plan does 

not have an immediately commencing straight life annuity payable at both age 62 and the age of benefit commencement, the 

adjusted dollar limitation is also the annual amount of a benefit payable in the form of a straight life annuity commencing at the 

participant’s annuity starting date that is the actuarial equivalent of the dollar limitation determined under line III.a. However, in this 

case, actuarial equivalence is computed without regard to the plan’s actuarial factors, using a 5 percent interest rate assumption 

and the applicable mortality table and expressing the participant’s age based on completed calendar months as of the annuity 

starting date.

iii) If the annuity starting date is before age 62 and occurs in a limitation year beginning on or after July 1, 2007, and the plan has an 

immediately commencing straight life annuity payable at both age 62 and the age of benefit commencement, the adjusted dollar 

limitation is the lesser of (1) the adjusted dollar limitation determined in accordance with the preceding paragraph; and (2) the 

product of the dollar limitation under line III.a. multiplied by the ratio of the annual amount of the immediately commencing straight 

life annuity under the plan at the participant’s annuity starting date to the annual amount of the immediately commencing straight 

life annuity under the plan at age 62, both determined without applying the limitations of §415. 

415(b)(2)(C), 415(b)(2)(E)(i) and (v)

1.415(b)-1(d)

Line f. If the plan provides a retirement benefit which begins after age 65, the plan may provide for the dollar limitation determined under 

line Ill.a. to be adjusted (that is, increased for delayed commencement), although a participant’s benefit continues to be limited to 100% of 

the participant’s high three-year compensation. How the dollar limitation is adjusted for delayed commencement depends on whether the 

annuity starting date is in a limitation year beginning before July 1, 2007 or in a limitation year beginning on or after that date. If the annuity 

starting date is in a limitation year beginning on or after July 1, 2007, the adjustment that is required further depends on whether the plan 

offers an immediately commencing straight life annuity at both the age of benefit commencement and age 65. 
Page 9 For applications submitted to conform to the 2020 RA List

The adjustments described below for post-65 benefit commencement take into account mortality in determining actuarial equivalence. 

However, to the extent the plan does not forfeit benefits upon the participant’s death before the annuity starting date, the plan may not 

take into account the mortality decrement for the probability of death between age 65 and the annuity starting date in determining actuarial 

equivalence for purposes of the age adjustments. If the plan does not charge participants for providing a qualified preretirement survivor 

annuity, the plan is treated as not forfeiting benefits on death.

i) If the annuity starting date is after age 65 and occurs in a limitation year beginning before July 1, 2007, the adjusted dollar limitation 

is the annual amount of a benefit payable in the form of a straight life annuity commencing at the participant’s annuity starting 

date that is the actuarial equivalent of the dollar limitation under line III.a. For purposes of this adjustment, actuarial equivalence 

is computed using whichever of the following produces the smaller annual amount: (1) the interest rate and the mortality table or 

other tabular factor specified in the plan for determining actuarial equivalence for delayed retirement purposes; or (2) a 5 percent 

interest rate assumption and the applicable mortality table.

ii) If the annuity starting date is after age 65 and occurs in a limitation year beginning on or after July 1, 2007, and the plan does 

not have an immediately commencing straight life annuity payable at both age 65 and the age of benefit commencement, the 

adjusted dollar limitation is also the annual amount of a benefit payable in the form of a straight life annuity commencing at the 

participant’s annuity starting date that is the actuarial equivalent of the dollar limitation determined under line III.a. However, in this 

case, actuarial equivalence is computed without regard to the plan’s actuarial factors, using a 5 percent interest rate assumption 

and the applicable mortality table and expressing the participant’s age based on completed calendar months as of the annuity 

starting date.

iii) If the annuity starting date is after age 65 and occurs in a limitation year beginning on or after July 1, 2007, and the plan has an 

immediately commencing straight life annuity payable at both age 65 and the age of benefit commencement, the adjusted dollar 

limitation is the lesser of (1) the adjusted dollar limitation determined in accordance with the preceding paragraph; and (2) the 

product of the dollar limitation under line III.a. multiplied by the ratio of the annual amount of the adjusted immediately commencing 

straight life annuity under the plan at the participant’s annuity starting date to the annual amount of the adjusted immediately 

commencing straight life annuity under the plan at age 65, both determined without applying the limitations of this article. The 

adjusted immediately commencing straight life annuity at the participant’s annuity starting date means the annual amount of 

such annuity payable to the participant, computed without regard to the participant’s accruals after age 65 but including actuarial 

adjustments even if those actuarial adjustments are used to offset accruals; and the adjusted immediately commencing straight 

life annuity at age 65 means the annual amount of such annuity that would be payable to a hypothetical participant who is age 65 

and has the same accrued benefit as the participant.

415(b)(2)(D), 415(b)(2)(E)(iii) and (V)

1.415(b)-1(e) 

Line g. Under §411, if benefits are not paid to a participant upon attainment of normal retirement age (NRA), the plan must either provide for 

the suspension of the participant’s benefit under §411(a)(3)(B) or actuarially increase the benefit for late retirement to avoid an impermissible 

forfeiture of the benefit. If the NRA under the plan is less than 65, the requirement to actuarially increase the benefit after NRA could, when 

coupled with the fact that the §415 dollar limit is not adjusted between age 62 and age 65, cause the plan to violate §415. This would 

occur where the participant works past NRA and the benefit equals the §415 dollar limit at an age between 62 and 65. Any actuarial 

increase after that age and prior to age 65 would violate §415. Accordingly, if the plan’s NRA is less than 65, the plan must coordinate the 

requirements for nonforfeitablity of benefits and actuarial increase for delayed retirement with the limits of §415. One way to satisfy these 

requirements is to suspend the participant’s benefit as permitted under §411(a)(3)(B). However, the prohibition on amending a plan to place 

greater restrictions or conditions on §411(d)(6) protected benefits by adding or modifying a suspension of benefits provision may eliminate 

suspension as an option. In this case, the plan must provide for the in-service payment of the participant’s benefit if the participant has 

reached NRA and the benefit cannot be actuarially increased without violating §415.

411(a)

1.411(d)-3(a)(3), 1.411(d)-3(j)(3)

Rev. Rul. 2001-51, 2001-2 C.B. 427, Q&A-4 

Line h. The annual benefit (without regard to the age at which benefits commence) payable with respect to a participant is not considered to 

exceed the otherwise applicable limitations on benefits under §415(b) if (a) the employer-derived retirement benefits under the plan and all 

other defined benefit plans of the employer do not in the aggregate exceed $10,000 for the limitation year or any prior limitation year, and (b) 

the employer has not at any time maintained a defined contribution plan in which the participant participated. In the case of a multiemployer 

plan, the $10,000 minimum benefit rule applies regardless of whether the participant ever participated in another plan of the employer, 

provided that no such other plan was maintained as a result of collective bargaining with the same employee representative as the 

multiemployer plan. For purposes of the special exception for total benefits not in excess of $10,000, mandatory employee contributions to 

a defined benefit plan, an individual medical benefits account under §401(h), and a postretirement medical benefits account under §419A(d)

(1) are not considered separate defined contribution plans. Also, no upward adjustment need be made to the value of the retirement benefit 

payable under the plan if the benefit payable is not in the form of a straight life annuity. 

415(b)(4)

1.415(b)-1(f) 

Line i. The percentage of compensation limitation described in line Ill.a. and the $10,000 minimum benefit limitation in line Ill.g. must be 

reduced for a participant who begins to receive retirement benefits under the plan when the participant has less than ten years of service. 

The reduction is accomplished by multiplying the otherwise applicable limitation by the following fraction: Years of service with the employer 

including the current limitation year (but not less than one), divided by 10. 
Page 10 For applications submitted to conform to the 2020 RA List

For this purpose, a year of service may be determined on any reasonable and consistent basis. 

415(b)(5)(B)

1.415(b)-1(g)(2) 

Line j. The dollar limitation of III.a. is reduced for participants with less than 10 years of participation in the plan. Specifically, the dollar 

limitation is multiplied by a fraction, the numerator of which is the number of years (computed to fractional parts of a year, but not less than 

one) of participation in the defined benefit plan of the employer, and the denominator of which is 10. 

For purposes of determining a participant’s years of participation, the participant shall be credited with a year of participation (computed to 

fractional parts of a year) for each accrual computation period for which: (1) the participant is credited with at least the service required to 

accrue a benefit, and (2) the participant is included as a plan participant under the eligibility provisions of the plan for at least one day of 

the accrual computation period. If these two conditions are met, the portion of a year of participation credited to the participant shall equal 

the amount of benefit accrual service credited to the participant for such accrual computation period. For example, if under the terms of a 

plan, a participant receives 1/10 of a year of benefit accrual service for an accrual computation period for each 200 hours of service, and 

the participant is credited with 1,000 hours of service for the period, the participant is credited with 1/2 a year of participation. 

For purposes of determining years of participation, a participant who is permanently and totally disabled within the meaning of §415(c)(3)

(C)(i) for an accrual computation period is credited with a year of participation for that period.

The plan must be established before the end of the accrual computation period in order to credit a participant with any part of a year of 

participation for that period.

415(b)(5)(B), 1.415(b)-1(g)(1) 

1.415(b)-1(g)(1) 

Line k. All the qualified defined benefit plans ever maintained by the employer or a predecessor employer (whether or not such plans 

are terminated) are treated as one defined benefit plan for purposes of the limitations under §415(b). For this purpose, a qualified defined 

benefit plan maintained by any member of a controlled group of corporations or commonly controlled trades or businesses (as defined in 

§§414(b) and (c) as modified by §415(h)), or any member of an affiliated service group (as defined in §414(m)), is considered maintained 

by all the members. If the employer maintains a plan that provides a benefit which the participant accrued while performing services for a 

former employer, the former employer is a predecessor employer with respect to the participant in the plan. A former entity that antedates 

the employer is also a predecessor employer with respect to a participant if, under the facts and circumstances, the employer constitutes 

a continuation of all or a portion of the trade or business of the former entity. 

There are three exceptions to the foregoing plan aggregation rules that pertain to multiemployer plans, as defined in §414(f). First, 

multiemployer plans are not aggregated with other multiemployer plans for purposes of §415. Second, if the employer maintains a 

multiemployer plan and that plan so provides, only the benefits under the multiemployer plan that are provided by the employer are treated 

as benefits provided under the employer’s plans that are not multiemployer plans. Third, a multiemployer plan is disregarded for purposes 

of applying the percentage of compensation limitation under lines III.a. and III.h. to a plan which is not a multiemployer plan. 

The final regulations contain rules for determining the benefit to be taken into account in the case of plan termination or transfer of benefits 

to another plan, where a plan ceases to be affiliated and aggregated with the employer’s plan under line III.j. because of the break-up of 

the §414(b), (c) or (m) group, and with respect to the situation where the employer maintains a plan under which a participant accrued a 

benefit while performing services for a predecessor employer.

Plan termination – If the plan terminates with sufficient assets for the payment of all benefit liabilities and a participant has not yet commenced 

benefits, the benefits taken into account for §415 purposes are the benefits provided pursuant to the annuities purchased to provide the 

participant’s benefits at each possible annuity starting date. If there are insufficient assets for the payment of all benefit liabilities, the 

benefits taken into account are the benefits that are actually provided to the participant. 

Benefits transferred to another plan – If a participant’s benefits are transferred to another defined benefit plan of the employer and the 

transfer is not a transfer of distributable benefits pursuant to §1.411(d)-4, Q&A-3(c), of the regulations, the transferred benefits are not 

treated as being provided under the transferor plan (but are taken into account as benefits provided under the transferee plan). If a 

participant’s benefits are transferred to another defined benefit plan that is not maintained by the employer and the transfer is not a transfer 

of distributable benefits, the transferred benefits are treated by the employer’s plan as if such benefits were provided under annuities 

purchased to provide benefits under a plan of the employer that terminated immediately prior to the transfer with sufficient assets to pay 

all benefit liabilities. In the case of a transfer of distributable benefits, the amount transferred is treated as a benefit paid from the transferor 

plan. 

Cessation of affiliation because of break-up of the §414(b), (c) or (m) group – The formerly affiliated plan continues to be treated as a plan of 

the employer, but it is treated as if it had terminated immediately prior to the cessation of affiliation (e.g., the sale of a member of the group 

outside the group or the transfer of plan sponsorship outside the group) with sufficient assets to pay participants’ benefit liabilities under the 

plan and had purchased annuities to provide benefits. 

Plan maintained by successor employer – If the employer maintains a defined benefit plan that provides benefits accrued by a participant 

while performing services for a predecessor employer, the participant’s benefits under any plan maintained by the predecessor employer 

are treated as provided under a plan maintained by the employer. However, for this purpose, the plan of the predecessor employer is 

treated as if it had terminated immediately prior to the event giving rise to the predecessor employer relationship (such as transfer of 
Page 11 For applications submitted to conform to the 2020 RA List

benefits or plan sponsorship) with sufficient assets to pay participants’ benefit liabilities under the plan, and had purchased annuities to 

provide benefits; the employer and the predecessor employer shall be treated as if they were a single employer immediately prior to such 

event and as unrelated employers immediately after the event; and if the event giving rise to the predecessor relationship is a benefit 

transfer, the transferred benefits shall be excluded in determining the benefits provide under the plan of the predecessor employer. 

The provisions in the plans must preclude the possibility that the total annual benefit payable to any participant under all defined benefit plans 

maintained by the employer or a predecessor employer will exceed these limitations whether or not the §415 limitations are incorporated 

by reference. The use of a plan provision which automatically freezes or reduces the rate of benefit accrual to ensure that these limitations 

are not exceeded will not violate the requirement that benefits must be definitely determinable if the plan provision precludes employer 

discretion. Note that if the plans cannot have common participants, this requirement is satisfied. 

415(f)(1)(A) 

1.415(a)-1(d)(1)

1.415(f)-1
For applications submitted to conform to the 2020 RA List

Employee Benefit Plan 

Limitation on Contribution and Benefits 

(Worksheet Number 6 – Determination of Qualification)

Form 8384 (Rev. 6-2021) Catalog Number 62510X publish.no.irs.gov Department of the Treasury - Internal Revenue Service

Instructions – All items must be completed unless the contrary is specifically provided. A "Yes" answer indicates a favorable 

conclusion is warranted while a "No" answer indicates a problem exists. Please use the space on the worksheet to explain any "No" 

answer. Numbers in brackets refer to EDS paragraph numbers. See Publication 7001, Explanation Number 6, for guidance in 

completing this form.

The technical principles in this worksheet may be changed by future regulations or guidelines.

Name of plan

I. General Definitions Plan Reference Yes No N/A

a. If the plan defines the limitation year that will be used for purposes of IRC § 415,

does the definition meet the requirements of the regulations? [0601]

b. Does the plan's definition of compensation satisfy the requirements of IRC § 415(c)

(3) and the regulations? [0602]

c. If the plan is sponsored by an Indian tribal government, does the plan's definition of

compensation for § 415 purposes include remuneration for fishing-rights related

income, for years beginning after November 15, 2013, as required by regulations

under IRC § 415? [0619]

d. If this is a defined contribution plan, does the plan's definition of compensation for

§ 415 purposes include ‘difficulty of care payments’, otherwise excludible under

IRC § 131, for years beginning after December 31, 2015? [0620]

II. Limitations On Contributions–Defined Contribution Plans and Certain Defined

Benefit Plans Plan Reference Yes No N/A

Note: If the plan is a defined benefit plan, complete this Part II only if the plan provides for employee contributions or employer contributions to an 

individual medical benefit account. 

a. If the plan includes a definition of annual additions, does the definition satisfy the

requirements of the Code and regulations? [0603]

b. Are annual additions on behalf of any participant during the limitation year limited to

the lesser of (i) 100% of the participant's compensation or (ii) $40,000 adjusted for

cost-of-living increases pursuant to § 415(d)? [0604]

c. If the plan provides a mechanism by which excess annual additions due to (i) a

reasonable estimation of a participant's annual compensation, or (ii) a reasonable

error in determining the amount of elective deferrals under § 402(g)(3), or (iii) an

allocation of forfeitures are reduced, does the mechanism conform to one of the

methods described in the 1981 regulations and does the plan limit the application of

the mechanism to limitation years beginning before July 1, 2007? [0605]

d. If the plan provides for contributions on behalf of participants who have become

permanently and totally disabled, as defined in § 22(e)(3), does the plan provide for

the continuation of contributions on behalf of all such disabled participants for a

fixed or determinable period or only for non-highly compensated employees who

become disabled, and are contributions nonforfeitable when made? [0606]

e. If the employer maintains another qualified defined contribution plan (or a defined

benefit plan to which employee contributions are made or under which employer

contributions are made to an individual medical benefit account, or a welfare benefit

fund under which employer contributions are made to an account of a key employee

to provide post-retirement medical benefits), do the provisions of the plan or plans

preclude the possibility that the limitations of this Part II will be exceeded when all

such plans are treated as one plan? [0607]

III. Limitations on Benefits–Defined Benefit Plans Plan Reference Yes No N/A

a. Is the annual benefit to which any participant is entitled, during the limitation year,

limited to the lesser of (i) 100% of the participant's average compensation for the

high three years of service, or (ii) $160,000 (or such larger amount as adjusted for

cost-of-living increases pursuant to § 415(d))? [0608]

This form is provided as an example only and should not be 

completed or returned to the Internal Revenue Service
Page 2 For applications submitted to conform to the 2020 RA List

Form 8384 (Rev. 6-2021) Catalog Number 62510X publish.no.irs.gov Department of the Treasury - Internal Revenue Service

III. Limitations on Benefits–Defined Benefit Plans – Continued Plan Reference Yes No N/A

b. Does the plan limit the compensation for a year that is used in determining the high 

three-year average compensation to the amount in effect for that year under § 401

(a)(17)? [0609]

c. If the plan provides for a retirement benefit which is payable in a form other than a straight life annuity, and the form of benefit is 

not subject to § 417(e)(3), is the benefit, for purposes of applying the limitation in Ill.a., adjusted to an actuarially equivalent 

straight life annuity that equals: 

(i) For limitation years beginning on or after July 1, 2007, the greater of the annual 

amount of the straight life annuity (if any) payable under the plan at the same 

annuity starting date, and the annual amount of a straight life annuity 

commencing at the same annuity starting date that has the same actuarial 

present value as the participant’s form of benefit computed using an interest rate 

of 5 percent and the applicable mortality table under § 417(e)(3) and

(ii) For limitation years beginning before July 1, 2007, the annual amount of a 

straight life annuity commencing at the same annuity starting date that has the 

same actuarial present value as the participant’s form of benefit computed using 

whichever of the following produces the greater annual amount: (1) the interest 

rate and mortality table or other tabular factor specified in the plan for adjusting 

benefits in the same form; and (2) a 5 percent interest rate assumption and the 

applicable mortality table? [0610]

d. If the plan provides for a retirement benefit which is payable in a form other than a straight life annuity, and the form of the benefit 

is subject to § 417(e)(3), is the benefit, for purposes of applying the limitation in III.a., adjusted to an actuarially equivalent straight 

life annuity that equals:

(i) If the annuity starting date is in a plan year beginning after December 31, 2005, 

the annual amount of the straight life annuity commencing at the same annuity 

starting date that has the same actuarial present value as the participant’s form 

of benefit, using whichever of the following produces the greatest annual amount: 

(1) the interest rate and the mortality table or other tabular factor specified in the 

plan for adjusting benefits in the same form; (2) a 5.5 percent interest rate 

assumption and the applicable mortality table; and (3) the applicable interest rate 

under § 417(e)(3) and the applicable mortality table, divided by 1.05;

(ii) If the annuity starting date is in a plan year beginning in 2004 or 2005, the annual 

amount of the straight life annuity commencing at the same annuity starting date 

that has the same actuarial present value as the participant’s form of benefit 

payable, using whichever of the following produces the greater annual amount: 

(1) the interest rate and mortality table or other tabular factor specified in the plan 

for adjusting benefits in the same form; and (2) 5.5 percent interest and the 

applicable mortality table; and

(iii) If the annuity starting date is on or after the first day of the first plan year 

beginning in 2004 and before December 31, 2004, and the plan applies the 

transition rule in § 101(d)(3) of PFEA ’04 in lieu of the rule in (ii), the annual 

amount of the straight life annuity commencing at the same annuity starting date 

that has the same actuarial present value as the participant’s form of benefit, 

determined in accordance with Notice 2004-78? [0611]

e. If a plan provides a retirement benefit beginning before age 62, is the benefit limited to:

(i) If the annuity starting date is in a limitation year beginning before July 1, 2007, 

the annual amount of a benefit payable in the form of a straight life annuity 

commencing at the participant’s annuity starting date that is the actuarial 

equivalent of the dollar limitation determined under line III.a., with actuarial 

equivalence computed using whichever of the following produces the smaller 

annual amount: (1) the interest rate and mortality table or other tabular factor 

specified in the plan for determining actuarial equivalence for early retirement 

purposes; or (2) a 5 percent interest rate assumption and the applicable mortality 

table;

This form is provided as an example only and should not be 

completed or returned to the Internal Revenue Service
Page 3 For applications submitted to conform to the 2020 RA List

Form 8384 (Rev. 6-2021) Catalog Number 62510X publish.no.irs.gov Department of the Treasury - Internal Revenue Service

III. Limitations on Benefits–Defined Benefit Plans – Continued Plan Reference Yes No N/A

(ii) If the annuity starting date is in a limitation year beginning on or after July 1, 

2007, and the plan does not have an immediately commencing straight life 

annuity payable at both age 62 and the age of benefit commencement, the 

annual amount of a benefit payable in the form of a straight life annuity 

commencing at the participant’s annuity starting date that is the actuarial 

equivalent of the dollar limitation determined under line III.a., with actuarial 

equivalence computed using a 5 percent interest rate assumption and the 

applicable mortality table and expressing the participant’s age based on 

completed calendar months as of the annuity starting date; and 

(iii) If the annuity starting date is in a limitation year beginning on or after July 1, 

2007, and the plan has an immediately commencing straight life annuity payable 

at both age 62 and the age of benefit commencement, the lesser of (1) the 

adjusted dollar limitation determined in accordance with (ii); and (2) the product 

of the dollar limitation under line III.a. multiplied by the ratio of the annual amount 

of the immediately commencing straight life annuity under the plan at the 

participant’s annuity starting date to the annual amount of the immediately 

commencing straight life annuity under the plan at age 62, both determined 

without applying the limitations of § 415? [0612]

f. If the retirement benefit under the plan may begin after age 65, does the plan provide for an increase in the maximum dollar 

limitation on benefits that is limited to:

(i) If the annuity starting date is in a limitation year beginning before July 1, 2007, 

the annual amount of a benefit payable in the form of a straight life annuity 

commencing at the participant’s annuity starting date that is the actuarial 

equivalent of the dollar limitation determined under line III.a., with actuarial 

equivalence computed using whichever of the following produces the smaller 

annual amount: (1) the interest rate and mortality table or other tabular factor 

specified in the plan for determining actuarial equivalence for delayed retirement 

purposes; or (2) a 5 percent interest rate assumption and the applicable mortality 

table;

(ii) If the annuity starting date is in a limitation year beginning on or after July 1, 

2007, and the plan does not have an immediately commencing straight life 

annuity payable at both age 65 and the age of benefit commencement, the 

annual amount of a benefit payable in the form of a straight life annuity 

commencing at the participant’s annuity starting date that is the actuarial 

equivalent of the dollar limitation determined under line III.a., with actuarial 

equivalence computed using a 5 percent interest rate assumption and the 

applicable mortality table and expressing the participant’s age based on 

completed calendar months as of the annuity starting date; and

(iii) If the annuity starting date is in a limitation year beginning on or after July 1, 

2007, and the plan has an immediately commencing straight life annuity payable 

at both age 65 and the age of benefit commencement, the lesser of (1) the 

adjusted dollar limitation determined in accordance with (ii); and (2) the product 

of the dollar limitation under line III.a. multiplied by the ratio of the annual amount 

of the immediately commencing straight life annuity under the plan at the 

participant’s annuity starting date to the annual amount of the immediately 

commencing straight life annuity under the plan at age 65, both determined 

without applying the limitations of § 415? [0613]

g. If the plan’s normal retirement age is less than 65, does the plan coordinate the 

requirements for actuarial increase for delayed retirement and nonforfeitability of 

benefits with the limits of § 415, for example, by providing for the in-service 

distribution of a participant’s benefit where post-NRA actuarial increases would 

cause the benefit to exceed those limits? [0614]

h. If the plan provides a minimum retirement benefit that otherwise exceeds the 

limitations on benefits in Ill.a., is such benefit provided only to a participant whose 

retirement benefits under the plan and all other defined benefit plans of the 

employer do not, in the aggregate, exceed $10,000 for the limitation year? [0615]

This form is provided as an example only and should not be 

completed or returned to the Internal Revenue Service
Page 4 For applications submitted to conform to the 2020 RA List

Form 8384 (Rev. 6-2021) Catalog Number 62510X publish.no.irs.gov Department of the Treasury - Internal Revenue Service

III. Limitations on Benefits–Defined Benefit Plans – Continued Plan Reference Yes No N/A

i. If a participant has less than 10 years of service at the time the participant begins to 

receive retirement benefits under the plan, is the percentage of compensation limit 

in Ill.a.(i), as adjusted as described in III.e. or III.f., if applicable, and the minimum 

benefit limit in Ill.h., if applicable, reduced by multiplying those limits by a fraction, 

the numerator of which is the number of years of service with the employer as of, 

and including, the current limitation year, and the denominator of which is 10? 

[0616]

j. If a participant has less than 10 years of participation at the time the participant 

begins to receive retirement benefits under the plan, is the dollar limit in III.a.(ii), as 

adjusted as described in III.e. or III.f., if applicable, reduced by multiplying the limit 

by a fraction, the numerator of which is the number of years of participation with the 

employer and the denominator of which is 10? [0617]

k. If the employer (or a predecessor employer) maintains, or at one time maintained, 

another qualified defined benefit plan, do the provisions of the plan or plans 

preclude the possibility that the limitations of this Part III. will be exceeded when all 

such defined benefit plans are treated as one plan? [0618]

This form is provided as an example only and should not be 

completed or returned to the Internal Revenue Service
For applications submitted to conform to the 2020 RA List

Employee Plan Deficiency Checksheet

Attachment Number 6

Limitations on Contributions and Benefits

Form 6044 (Rev. 6-2021) Catalog Number 43038M publish.no.irs.gov Department of the Treasury - Internal Revenue Service

For IRS Use Please furnish the amendment(s) requested in the section(s) checked below.

601

I.a.

Section of the plan must define the term "limitation year." If not, the plan's limitation year is the 

calendar year. Regs. § 1.415(j)-1. 

602

I.b.

Section of the plan should be amended to define the term "compensation" in accordance with IRC § 

415(c)(3) and § 1.415(c)-2 of the regulations.

603

II.a.

Section of the plan should be amended to define annual additions in accordance with the Code and 

regulations. IRC § 415(c), 415(l), 419A (d)(2) and (3), 419(e), and Regs. § 1.415(c)-1.

604

II.b.

Section of the plan must preclude the possibility that the annual additions to any participant's account 

for a limitation year will exceed the lesser of 100 percent of compensation or $40,000, as adjusted for cost-ofliving increases pursuant to IRC § 415(c)(1), 415(d)(1), 415(d)(3), and 415(d)(4), and Regs. § 1.415(c)-1. 

605

II.c.

Section of the plan may provide for the use of one of the methods set forth in §1.415-6(b)(6) of the 

1981 regulations only with respect to limitation years beginning before July 1, 2007, and only in situations where 

excess annual additions may result from contributions based on estimated annual compensation, the allocation 

of forfeitures, or a reasonable error in determining the amount of elective deferrals under § 402(g)(3). Regs. § 

1.401(a)-2(b), § 1.415-6(b)(6) of the 1981 regulations.

606

II.d.

Where a defined contribution plan provides for an employer to continue to make contributions on behalf of an 

employee who is permanently and totally disabled (as defined in § 22(e)(3) of the Code), then the imputed 

compensation upon which contributions are made must be no greater than the rate at which the participant was 

paid immediately before becoming permanently and totally disabled. A plan may provide for the continuation of 

contributions on behalf of all such disabled participants for a fixed or determinable period or only on behalf of 

those employees who were nonhighly compensated when they became disabled. Such contributions must be 

nonforfeitable when made. Section of the plan should be amended accordingly. IRC § 415(c)(3)(C) 

and Regs. § 1.415(c)-2(g)(4).

607

II.e.

Except as provided in this paragraph with respect to multiemployer plans (as defined in § 414(f)), section 

 of the plan must provide that all defined contribution plans (including voluntary employee contribution 

accounts in a defined benefit plan, mandatory contributions to a defined benefit plan, individual medical benefit 

accounts under § 401(h), key employee accounts under a welfare benefit plan described in § 419, and simplified 

employee pensions under § 408(k)) of the employer or a predecessor employer, whether or not terminated, will 

be treated as one defined contribution plan for purposes of the limitations under § 415(c). Otherwise each of the 

defined contribution plans must contain provisions which limit each plan, without involving employer discretion, 

such that the possibility is precluded that the aggregated defined contribution plans may exceed the limitations 

of § 415(c). Where the employer is a member of a controlled group of corporations or commonly controlled 

trades or businesses, or a member of an affiliated service group, within the meaning of § 414(b), (c) or (m) and 

415(g) and (h), the plan must provide that all such employers are treated as a single employer for purposes of 

the plan's application of the § 415 limitations. Notwithstanding the preceding, multiemployer plans are not 

aggregated with other multiemployer plans for purposes of § 415. IRC § 419, 415(f)(1) and (k)(4); Regs. § 1.415

(a)-1(d), 1.415(c)-1, 1.415(f)(1), and 1.401(a)-1(b)(1)(iii).

608

III.a.

Section of the plan must provide that the annual benefit to which any participant may be entitled, in 

the form of a straight life annuity, shall not exceed the lesser of $160,000 or 100 percent of the participant's high 

three year average compensation (or fewer, if the employee does not have three consecutive years). The 

percentage of compensation limit does not apply, however, if the plan is a governmental plan (as defined in § 

414(d)), a multiemployer plan (as defined in § 414(f)), or a collectively bargained plan that is described in § 415

(b)(7), and does not apply to a participant in a plan maintained by a church described in § 3121(w)(3)(A) who 

has never been a § 414(q) highly compensated employee of the church. If a participant has distributions 

commencing at different times (for example, multiple annuity starting dates), the limitations must be satisfied as 

of each annuity starting date, actuarially adjusting for past and future distributions. IRC § 415(b)(1) and (3), 415

(d)(1), Regs. § 1.415-(a)-1(d)(3)(v), 1.415(b)-1(b), 1.415(b)-1(c)(5), 1.415(d)-1.

609

III.b.

Section of the plan must limit the compensation for a year that is used to determine a participant’s 

high three-year average compensation for purposes of § 415 to the amount in effect for that year under § 401(a)

(17). IRC § 401(a)(17), Regs. § 1.415(b)-1(a)(5)(i), 1.415(c)-2(f).

610

III.c.

Section of the plan must provide that, for purposes of applying the limits of § 415, a retirement benefit 

that is payable in any form other than a straight life annuity and that is not subject to § 417(e)(3) must be 

adjusted to an actuarially equivalent straight life annuity that equals:

This form is provided as an example only and should not be 

completed or returned to the Internal Revenue Service
Page 2 For applications submitted to conform to the 2020 RA List

Form 6044 (Rev. 6-2021) Catalog Number 43038M publish.no.irs.gov Department of the Treasury - Internal Revenue Service

(i) for limitation years beginning on or after July 1, 2007, the greater of the annual amount of the straight life 

annuity (if any) payable under the plan at the same annuity starting date, and the annual amount of a straight 

life annuity commencing at the same annuity starting date that has the same actuarial present value as the 

participant’s form of benefit computed using an interest rate of 5 percent and the applicable mortality table under 

§ 417(e)(3). 

(ii) for limitation years beginning before July 1, 2007, the annual amount of a straight life annuity commencing at 

the same annuity starting date that has the same actuarial present value as the participant’s form of benefit 

computed using whichever of the following produces the greater annual amount: (1) the interest rate and 

mortality table or other tabular factor specified in the plan for adjusting benefits in the same form; and (2) a 5 

percent interest rate assumption and the applicable mortality table. 

The applicable mortality table is the mortality table within the meaning of § 417(e)(3)(B), which is based on 

mortality table under § 430((h)(3)(A). IRC § 415(b)(2)(B), 415(b)(2)(E), 417(e)(3), and 430(h)(3); Regs. § 1.415

(b)-1(a), (b) and (c), 1.417(e)-1(d), Rev. Rul. 98-1, 1998-1 C.B. 249, Rev. Rul. 2001-62, 2001-2 C.B. 632.

611

III.d.

Section of the plan must provide that, for purposes of applying the limits of § 415, a retirement benefit 

that is payable in any form other than a straight life annuity and that is subject to § 417(e)(3) must be adjusted to 

an actuarially equivalent straight life annuity that equals:

(i) if the annuity starting date is in a plan year beginning after 2005, the annual amount of the straight life annuity 

commencing at the same annuity starting date that has the same actuarial present value as the participant’s 

form of benefit, using whichever of the following produces the greatest annual amount: (1) the interest rate and 

the mortality table or other tabular factor specified in the plan for adjusting benefits in the same form; (2) a 5.5 

percent interest rate assumption and the applicable mortality table; and (3) the applicable interest rate under § 

417(e)(3) and the applicable mortality table, divided by 1.05. 

(ii) if the annuity starting date is in a plan year beginning in 2004 or 2005, the annual amount of the straight life 

annuity commencing at the same annuity starting date that has the same actuarial present value as the 

participant’s form of benefit payable, using whichever of the following produces the greater annual amount: (1) 

the interest rate and mortality table or other tabular factor specified in the plan for adjusting benefits in the same 

form; and (2) 5.5 percent interest and the applicable mortality table. 

(iii) if the annuity starting date is on or after the first day of the first plan year beginning in 2004 and before 

December 31, 2004, and the plan applies the transition rule in § 101(d)(3) of PFEA ’04 in lieu of the rule in (ii), 

the annual amount of the straight life annuity commencing at the same annuity starting date that has the same 

actuarial present value as the participant’s form of benefit, determined in accordance with Notice 2004-78. 

The applicable mortality table is the mortality table within the meaning of §417(e)(3)(B), which is based on 

mortality table under § 430((h)(3)(A). IRC § 415(b)(2)(B), 415(b)(2)(E) and 417(e)(3), and 430(h)(3); Regs. § 

1.415(b)-1(a), (b) and (c), 1.417(e)-1(d); Rev. Rul. 98-1, 1998-1 C.B. 249; Rev. Rul. 2001-62, 2001-2 C.B. 632; 

Notice 2004-78, 2004-2 C.B. 879.

612

III.e.

Section of the plan must provide that where a retirement benefit is provided beginning before age 62, 

the benefit will be limited to:

(i) if the annuity starting date is in a limitation year beginning before July 1, 2007, the annual amount of a benefit 

payable in the form of a straight life annuity commencing at the participant’s annuity starting date that is the 

actuarial equivalent of the dollar limitation under § 415(b)(1)(A) (as adjusted under § 415(d)), with actuarial 

equivalence computed using whichever of the following produces the smaller annual amount: (1) the interest 

rate and mortality table or other tabular factor specified in the plan for determining actuarial equivalence for 

early retirement purposes; or (2) a 5 percent interest rate assumption and the applicable mortality table. 

(ii) if the annuity starting date is in a limitation year beginning on or after July 1, 2007, and the plan does not 

have an immediately commencing straight life annuity payable at both age 62 and the age of benefit 

commencement, the annual amount of a benefit payable in the form of a straight life annuity commencing at the 

participant’s annuity starting date that is the actuarial equivalent of the dollar limitation under § 415(b)(1)(A) (as 

adjusted under § 415(d)), with actuarial equivalence computed using a 5 percent interest rate assumption and 

the applicable mortality table and expressing the participant’s age based on completed calendar months as of 

the annuity starting date.

(iii) if the annuity starting date is in a limitation year beginning on or after July 1, 2007, and the plan has an 

immediately commencing straight life annuity payable at both age 62 and the age of benefit commencement, 

the lesser of (1) the adjusted dollar limitation determined in accordance with (ii); and (2) the product of the dollar 

limitation under § 415(b)(1)(A) (as adjusted under § 415(d)) multiplied by the ratio of the annual amount of the 

immediately commencing straight life annuity under the plan at the participant’s annuity starting date to the 

annual amount of the immediately commencing straight life annuity under the plan at age 62, both determined 

without applying the limitations of § 415.

The applicable mortality table is the mortality table within the meaning of § 417(e)(3)(B), which is based on 

mortality table under § 430((h)(3)(A). IRC § 415(b)(2)(C) and 415(b)(2)(E)(i) and (v); Regs. § 1.415(b)-1(d); Rev. 

Rul. 2001-62, 2001-2 C.B. 632. 

This form is provided as an example only and should not be 

completed or returned to the Internal Revenue Service
Page 3 For applications submitted to conform to the 2020 RA List

Form 6044 (Rev. 6-2021) Catalog Number 43038M publish.no.irs.gov Department of the Treasury - Internal Revenue Service

613

III.f.

If the benefit under the plan commences after age 65, the plan may provide that dollar limitation under § 415(b)

(1)(A)(as adjusted under § 415(d)) on such benefit is increased to:

(i) if the annuity starting date is in a limitation year beginning before July 1, 2007, the annual amount of a benefit 

payable in the form of a straight life annuity commencing at the participant’s annuity starting date that is the 

actuarial equivalent of the dollar limitation under § 415(b)(1)(A)(as adjusted under §415(d)), with actuarial 

equivalence computed using whichever of the following produces the smaller annual amount: (1) the interest 

rate and mortality table or other tabular factor specified in the plan for determining actuarial equivalence for 

delayed retirement purposes; or (2) a 5 percent interest rate assumption and the applicable mortality table.

(ii) if the annuity starting date is in a limitation year beginning on or after July 1, 2007, and the plan does not 

have an immediately commencing straight life annuity payable at both age 65 and the age of benefit 

commencement, the annual amount of a benefit payable in the form of a straight life annuity commencing at the 

participant’s annuity starting date that is the actuarial equivalent of the dollar limitation under § 415(b)(1)(A)(as 

adjusted under § 415(d)), with actuarial equivalence computed using a 5 percent interest rate assumption and 

the applicable mortality table and expressing the participant’s age based on completed calendar months as of 

the annuity starting date.

(iii) if the annuity starting date is in a limitation year beginning on or after July 1, 2007, and the plan has an 

immediately commencing straight life annuity payable at both age 65 and the age of benefit commencement, 

the lesser of (1) the adjusted dollar limitation determined in accordance with (ii); and (2) the product of the dollar 

limitation under § 415(b)(1)(A)(as adjusted under §415(d)) multiplied by the ratio of the annual amount of the 

immediately commencing straight life annuity under the plan at the participant’s annuity starting date to the 

annual amount of the immediately commencing straight life annuity under the plan at age 65, both determined 

without applying the limitations of §415.

The applicable mortality table is the mortality table within the meaning of § 417(e)(3)(B), which is based on 

mortality table under § 430((h)(3)(A). IRC § 415(b)(2)(D) and 415(b)(2)(E)(iii); Regs. § 1.415(b)-1(e); Final 

Regulations under § 430(h)(3), 73 FR 44632, Rev. Rul. 2001-62, 2001-2 C.B. 632.

614

III.g.

Because the plan’s Normal Retirement Age (NRA) is less than 65, the plan must coordinate the requirements 

for actuarial increase for delayed retirement and nonforfeitability of benefits with the limits of § 415 so that postNRA actuarial increases do not cause the benefit to exceed those limits. One way to satisfy these requirements 

is to suspend the participant’s benefit as permitted under § 411(a)(3)(B). However, the prohibition on amending 

a plan to place greater restrictions or conditions on § 411(d)(6) protected benefits by adding or modifying a 

suspension of benefits provision may eliminate suspension as an option. In this case, the plan must provide for 

the in-service payment of the participant’s benefit if the participant has reached NRA and the benefit cannot be 

actuarially increased without violating § 415. IRC § 411(a)(3); Regs. §1.411(d)-3(a)(3), 1.411(d)-3(j)(3); Rev. 

Rul. 2001-51, 2001-2 C.B. 427, Q&A-4.

615

III.h.

The plan may provide that the otherwise applicable limitations on benefits of § 415(b) of the Code do not apply 

where the total employer-derived retirement benefits payable to a participant under this defined benefit plan and 

all other qualified defined benefit plans of the employer do not exceed $10,000 in the aggregate. Where a plan 

provides the $10,000 minimum benefit limitation, the plan must provide that the minimum benefit limitation is not 

applicable for a participant whose employer maintains or has maintained a defined contribution plan in which 

such employee participated. In the case of a multiemployer plan, the $10,000 minimum benefit limitation applies 

regardless of whether the participant ever participated in another plan of the employer, provided that no such 

other plan was maintained as a result of collective bargaining with the same employee representative as the 

multiemployer plan. IRC § 415(b)(4) and Regs. § 1.415(b)-1(f).

616

III.i.

Section of the plan must provide that the percentage of compensation limitation of § 415(b)(1)(B) and 

the $10,000 minimum benefit limitation of § 415(b)(4), if provided, must be reduced where a participant has less 

than 10 years of service with the employer at the time the participant begins to receive retirement benefits under 

the plan. The reduction is made by multiplying the applicable limitation by the following fraction: Years of service 

with the employer as of, and including, the current limitation year, divided by 10. IRC § 415(b)(5)(B), Regs. § 

1.415(b)-1(g)(2).

617

III.j.

Section of the plan must provide that the dollar limitation of § 415(b)(1)(A) (as adjusted under 

§ 415(d)) must be reduced where a participant has less than 10 years of participation when retirement benefits 

under the plan commence. The reduction is made by multiplying the dollar limitation by the following fraction: 

Years of participation with the employer as of, and including, the current limitation year, divided by 10. IRC § 

415(b)(5)(A), Regs. § 1.415(b)-1(g)(1).

This form is provided as an example only and should not be 

completed or returned to the Internal Revenue Service
Page 4 For applications submitted to conform to the 2020 RA List

Form 6044 (Rev. 6-2021) Catalog Number 43038M publish.no.irs.gov Department of the Treasury - Internal Revenue Service

618

III.k.

Except as provided in the following paragraph with respect to multiemployer plans (as defined in § 414(f)), 

section of the plan must provide that all defined benefit plans of the employer (or a predecessor 

employer), whether or not terminated, will be treated as one defined benefit plan for purposes of the limitations 

under IRC § 415(b). (For this purpose, if the employer maintains a plan that provides a benefit which the 

participant accrued while performing services for a former employer, the former employer is a predecessor 

employer with respect to the participant in the plan. A former entity that antedates the employer is also a 

predecessor employer with respect to a participant if, under the facts and circumstances, the employer 

constitutes a continuation of all or a portion of the trade or business of the former entity.) Each of the defined 

benefit plans must contain provisions which limit each so that the possibility is precluded that the aggregate 

defined benefit plan may exceed the limitations of § 415(b). Where the employer is a member of a controlled 

group of corporations or commonly controlled trades or businesses, or a member of an affiliated service group 

within the meaning of sections 414(b), (c) or (m) and 415(g) and (h), the plan must provide that all such 

employers are treated as a single employer for purposes of the plan's application of the § 415 limitations. See § 

1.415(f)-1for rules regarding the benefits required to be taken into account when plans are aggregated. 

Multiemployer plans are not aggregated with other multiemployer plans for purposes of § 415. In addition, if the 

employer maintains a multiemployer plan and that plan so provides, only the benefits under the multiemployer 

plan that are provided by the employer are treated as benefits provided under the employer’s plans that are not 

multiemployer plans. Finally, a multiemployer plan is disregarded for purposes of applying the percentage of 

compensation limitation under § 415(b)(1)(B) to a plan which is not a multiemployer plan. IRC § 415(f)(1)(A) and 

414(m)(4), and Regs. § 1.415-8(a)(1) and 1.401(a)-1(b)(1)(iii).

619

I.c.

Section of the plan should be amended to provide that the plan's definition of compensation for § 415 

purposes includes remuneration for fishing-rights related income, for years beginning after November 15, 2013. 

Prop. Reg. § 1.415(c)–2(g)(9)

620

I.d.

Section of the plan should be revised to define compensation for § 415 purposes to include ‘difficulty 

of care payments’, for years beginning after December 31, 2015 [0620]

This form is provided as an example only and should not be 

completed or returned to the Internal Revenue Service