Washington Administrative Code › Title 415 - Retirement Systems, Department of › Chapter 415-02 - General provisions › TAXES AND FEES › Section 415-02-752 - How does the department comply with Internal Revenue Code compensation limit rules?

Current through Register Vol. 24-14, July 15, 2024
(1) As used in
				this section, the term "eligible member" means a person who first became a
				member of the plan prior to the plan year beginning after December 31, 1995.
				Pursuant to section 13212(d)(3)(A) of OBRA '93, and the regulations issued
				under that section, eligible members are not subject to the limits of section
				401(a)(17) of the Internal Revenue Code, and the maximum compensation used in
				computing employee and employer contributions to or benefits due from the plan
				for eligible members shall be the maximum amount allowed by the plan to be so
				used on July 1, 1993. The limits referenced in subsections (2) and (3) of this
				section apply only to years beginning after December 31, 1995, and only to
				individuals who first became plan members in plan years beginning on and after
				January 1, 1996.
(2) Effective with
				respect to plan years beginning on and after January 1, 1996, and before
				January 1, 2002, the annual compensation of a plan member (who is not an
				eligible member) which exceeds one hundred fifty thousand dollars (as adjusted
				for cost-of-living increases under section 401(a)(17)(B) of the Internal
				Revenue Code) shall be ignored for purposes of computing employee and employer
				contributions to or benefits due from the plan. Effective only for the 1996
				plan year, in determining the compensation of an employee eligible for
				consideration under this provision, the rules of section 414(g)(6) of the
				Internal Revenue Code shall apply, except that in applying such rules, the term
				"family" shall include only the spouse of the member and any lineal descendants
				of the employee who have not attained age nineteen before the close of the
				year.
(3) Effective with respect to
				plan years beginning on and after January 1, 2002, the annual compensation of a
				plan member (who is not an eligible member) which exceeds two hundred thousand
				dollars (as adjusted for cost-of-living increases in accordance with section
				401(a)(17)(B) of the Internal Revenue Code) may not be used in determining
				benefits or contributions due for any plan year. Annual compensation means
				compensation during the plan year or such other consecutive twelve-month period
				over which compensation is otherwise determined under the plan (the
				determination period). The cost-of-living adjustment in effect for a calendar
				year applies to annual compensation for the determination period that begins
				with or within such calendar year. If the determination period consists of
				fewer than twelve months, the annual compensation limit is an amount equal to
				the otherwise applicable annual compensation limit multiplied by a fraction,
				the numerator of which is the number of months in the short determination
				period, and the denominator of which is twelve. If the compensation for any
				prior determination period is used in determining a plan member's contributions
				or benefits for the current plan year, the compensation for such prior
				determination period is subject to the applicable annual compensation limit in
				effect for that prior period. The determination period for testing
				contributions is the calendar year.
Statutory Authority:
					 RCW
					 41.50.050(5). 10-24-099,
					 §
											415-02-752, filed 12/1/10,
					 effective 1/1/11.