Illinois Administrative Code › Title 50 - INSURANCE › Part 4440 - IRS QUALIFICATION STATUS REQUIREMENTS FOR ARTICLE 3 POLICE PENSION FUNDS › Subpart D - RULE ON 415 LIMITATIONS › Section 4440.240 - 415(c) Limit

Current through Register Vol. 48, No. 28, July 12, 2024
After-tax member contributions or other annual additions with
				  respect to a member may not exceed the lesser of $40,000 (as adjusted pursuant
				  to IRC section 415(d)) or 100% of the member's compensation.
a) Annual additions are defined to mean the
				sum (for any year) of employer contributions to a defined contribution plan,
				member contributions, and forfeitures credited to a member's individual
				account. Member contributions are determined without regard to rollover
				contributions and to picked-up employee contributions that are paid to a
				defined benefit plan.
b) For
				purposes of applying the 415(c) limits only and for no other purpose, the
				definition of compensation, where applicable, will be compensation actually
				paid or made available during a limitation year, except as noted in subsection
				(c) and as permitted by 26 CFR 1.415(c)-2; however, member contributions picked
				up under IRC section 414(h) shall not be treated as compensation.
c) Unless another definition of compensation
				that is permitted by 26 CFR 1.415(c)-2 is specified by the plan, compensation
				will be defined as wages within the meaning of IRC section 3401(a) and all
				other payments of compensation to an employee by an employer for which the
				employer is required to furnish the employee a written statement under IRC
				sections 6041(d), 6051(a)(3) and 6052 and will be determined without regard to
				any rules under IRC section 3401(a) that limit the remuneration included in
				wages based on the nature or location of the employment or the services
				performed (such as the exception for agricultural labor in IRC section
				3401(a)(2)).
1) However, for limitation years
				beginning on and after January 1, 1998, compensation will also include amounts
				that would otherwise be included in compensation but for an election under IRC
				section 125(a), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b). For limitation
				years beginning on and after January 1, 2001, compensation will also include
				any elective amounts that are not includible in the gross income of the
				employee by reason of IRC section 132(f)(4).
2) For limitation years beginning on and
				after January 1, 2009, compensation for the limitation year will also include
				compensation paid by the later of 21/2 months after an employee's severance
				from employment or the end of the limitation year that includes the date of the
				employee's severance from employment if:
A)
				the payment is regular compensation for services during the employee's regular
				working hours, or compensation for services outside the employee's regular
				working hours (such as overtime or shift differential), commissions, bonuses or
				other similar payments, and, absent a severance from employment, the payments
				would have been paid to the employee while the employee continued in employment
				with the employer;
B) 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
C) payments pursuant to a nonqualified
				unfunded deferred compensation plan, but only if the payments would have been
				paid to the member at the same time if the member had continued employment with
				the employer and only to the extent that the payment is includible in the
				member's gross income.
3) Any payments not described in subsection
				(c)(2) are not considered compensation if paid after severance from employment,
				even if they are paid within 21/2 months following severance from employment,
				except for payments to the individual who does not currently perform services
				for the employer by reason of qualified military service (within the meaning of
				IRC section 414(u)(1)) to the extent these payments do not exceed the amounts
				the individual would have received if the individual had continued to perform
				services for the employer rather than entering qualified military
				service.
4) An employee who is in
				qualified military service (within the meaning of IRC section 414(u)(1)) shall
				be treated as receiving compensation from the employer during that period of
				qualified military service equal to:
A) the
				compensation the employee would have received during that period if the
				employee were not in qualified military service, determined based on the rate
				of pay the employee would have received from the employer but for the absence
				during the period of qualified military service; or
B) if the compensation the employee would
				have received during that period was not reasonably certain, the employee's
				average compensation from the employer during the 12 month period immediately
				preceding the qualified military service (or, if shorter, the period of
				employment immediately preceding the qualified military service).
5) For limitation years beginning
				on or after January 1, 2009, a member's compensation for purposes of this
				Section shall not exceed the annual limit under IRC section
				401(a)(17).
6) Back pay, within the
				meaning of 26 CFR 1.415(c)-2(g)(8), shall be treated as compensation for the
				limitation year to which the back pay relates to the extent the back pay
				represents wages and compensation that would otherwise be included under this
				subsection (c).