Louisiana Administrative Code › Title 58 - RETIREMENT › Part VII - School Employees Retirement System › Chapter 4 - Internal Revenue Code Provisions › Section VII-401 - Limitation on Benefits

Current through Register Vol. 50, No. 6, June 20, 2024
A.
				The limitations of this Chapter shall apply in limitation years beginning on or
				after July 1, 2007, except as otherwise provided herein.
B. The annual benefit otherwise payable to a
				member under the plan at any time shall not exceed the maximum permissible
				benefit. If the benefit the member would otherwise accrue in a limitation year
				would produce an annual benefit in excess of the maximum permissible benefit,
				the benefit shall be limited (or the rate of accrual reduced) to a benefit that
				does not exceed the maximum permissible benefit.
C. If the member is, or has ever been, a
				member in another qualified defined benefit plan (without regard to whether the
				plan has been terminated) maintained by the employer or a predecessor employer,
				the sum of the members annual benefits from all such plans may not exceed the
				maximum permissible benefit.
D. The
				application of the provisions of this chapter shall not cause the maximum
				permissible benefit for any member to be less than the members accrued benefit
				under all the defined benefit plans of the employer or a predecessor employer
				as of the end of the last limitation year beginning before July 1, 2007 under
				provisions of the plans that were both adopted and in effect before April 5,
				2007. The preceding sentence applies only if the provisions of such defined
				benefit plans that were both adopted and in effect before April 5, 2007
				satisfied the applicable requirements of statutory provisions, regulations, and
				other published guidance relating to section 415 of the
Internal
				Revenue Code
in effect as of the end of the last limitation year
				beginning before July 1, 2007, as described in section 1.415(a)-1(g)(4) of the
				income tax regulations.
E. The
				limitations of this chapter shall be determined and applied taking into account
				the rules in Section G.
F.
				Definitions
415
Safe-Harbor Compensation
-
a. Compensation is defined as wages,
				salaries, and fees for professional services and other amounts received
				(without regard to whether or not an amount is paid in cash) for personal
				services actually rendered in the course of employment with the employer
				maintaining the plan to the extent that the amounts are includible in gross
				income (including, but not limited to, commissions paid salespersons,
				compensation for services on the basis of a percentage of profits, commissions
				on insurance premiums, tips, bonuses, fringe benefits, and reimbursements, or
				other expense allowances under a nonaccountable plan (as described in section
				1.62-2(c) of the income tax regulations), and excluding the following:
i. employer contributions [other than
				elective contributions described in section 402(e)(3), section 408(k)(6),
				section 408(p)(2)(A)(i), or section 457(b)] to a plan of deferred compensation
				(including a simplified employee pension described in section 408(k) or a
				simple retirement account described in section 408(p), and whether or not
				qualified) to the extent such contributions are not includible in the members
				gross income for the taxable year in which contributed, and any distributions
				(whether or not includible in gross income when distributed) from a plan of
				deferred compensation (whether or not qualified);
ii. amounts realized from the exercise of a
				nonstatutory stock option (that is, an option other than a statutory stock
				option as defined in section 1.421-1(b) of the income tax regulations), or when
				restricted stock (or property) held by the member either becomes freely
				transferable or is no longer subject to a substantial risk of
				forfeiture;
iii. amounts realized
				from the sale, exchange or other disposition of stock acquired under a
				statutory stock option;
iv. other
				amounts that receive special tax benefits, such as premiums for group-term life
				insurance (but only to the extent that the premiums are not includible in the
				gross income of the member and are not salary reduction amounts that are
				described in section 125);
v. other
				items of remuneration that are similar to any of the items listed in Clauses i
				through iv above.