T.D. 9319 - Limitations on Benefits and Contributions Under Qualified Plans (IRC Section 415 Final Regulations) (PDF)
Final regulations under section 415 of the Code, including updates to the regulations for numerous statutory changes since comprehensive final regulations were last published under section 415, are effective April 5, 2007 and are generally effective for limitation years beginning on or after July 1, 2007.
The following is a brief overview of the material addressed in the regulations:
- Current statutory limitations under sections 415(b)(1)(A) and 415(c)(1) applicable for defined benefit and defined contribution plans, respectively.
- Changes to the rules for age adjustments to the applicable limitations under defined benefit plans, under which the dollar limitation is adjusted for commencement before age 62 or after age 65.
- Changes to the rules, including specification of parameters, for benefit adjustments under defined benefit plans.
- Phase-in of the dollar limitation under section 415(b)(1)(A) over 10 years ofparticipation.
- Addition of the section 401(a)(17) limitation on compensation that is permitted to be taken into account in determining plan benefits and the interaction of this requirement with the limitations under section 415.
- Exceptions to the compensation-based limitation for governmental andmultiemployer plans.
- Changes to the aggregation rules under section 415(f) under which multiemployer plans are not aggregated with single-employer plans for purposes of applying the compensation-based limitation of section 415(b)(1)(B) to a single-employer plan.
- Repeal of the section 415(e) combined limitation on participation in a defined benefit plan and a defined contribution plan.
- Changes to section 415(c) that were made in conjunction with the repeal of the exclusion allowance under section 403(b)(2).
- Current rounding and base period rules for annual cost-of-living adjustments.
- Changes to section 415(c) under which certain types of arrangements are no longer subject to the limitations of section 415(c) (such as individual retirement accounts other than SEPs) and other types of arrangements have become subject to the limitations of section 415(c) (such as certain individual medical accounts).
- Inclusion in compensation (for section 415 purposes) of certain salary reduction amounts not included in gross income.
- Modification for distributions with annuity starting dates in plan years beginning in years 2004 and 2005 made by PFEA with respect to the interest rate assumptions in section 415(b)(2)(E) for converting certain forms of benefits to an actuarially equivalent straight life annuity.
- The following modifications to section 415 made by the Pension Protection Act of 2006:
i. changes to the interest rate assumptions in section 415(b)(2)(E) that are used for converting certain forms of benefits to an equivalent straight life annuity;
ii. elimination of the active participation requirement in determining a participant’s high-3 years of service in section 415(b)(3);
iii. exemption from the section 415(b)(1)(B) compensation limit for certain benefits provided under a defined benefit plan maintained by an organization described in section 3121(w)(3)(A); and
iv. expansion of the definition of qualified participant in section 415(b)(2)(H) to include certain participants in a defined benefit plan maintained by an Indian tribal government.
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