Chapter 7 - Benefit Limitations under IRC 415

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Author:
bboylegsr
ID:
234768
Filename:
Chapter 7 - Benefit Limitations under IRC 415
Updated:
2013-09-14 13:38:54
Tags:
True False
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Description:
Benefit Limitations under IRC 415
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  1. If the elected form of an annuity is a qualified joint and survivor annuity, the maximum benefit under IRC 415 will have to be reduced.
    • False -
    • The dollar maximum under IRC 415 must be reduced for elected forms of benefit other than a straight life annuity or a qualified joint and survivor annuity.
  2. If the elected form of an annuity is a life and ten-year certain annuity, the maximum benefit under IRC 415 will have to be reduced.
    True
  3. For the percentage limit of IRC 415, compensation must be averaged over the highest five consecutive years.
    • False -
    • For the percentage limit, compensation must be averaged over the highest three consecutive years.
  4. The dollar limit of IRC 415 must be reduced 10% (but not below 10% of the full limit) for each year of service less than ten at normal retirement age.
    • False-
    • The dollar limit must be reduced for participation less than ten years.
  5. The $10,000 de minimis benefit of IRC 415 must be reduced by 10% (but not below 10% of the full limit) for each year that a participant in a defined contribution plan of the same employer.
    • False -
    • The $10,000 limit is not available at all to an employee who was in a defined contribution plan of the same employer.  If the person had not participated in a defined contribution plan, then the 10-year reduction of the $10,000 de minimis benefit is based upon years of service within the employer.
  6. A previously terminated defined benefit plan that has distributed all of its assets can be ignored in determining the maximum benefit under IRC 415 for a current plan.
    • False -
    • Prior defined benefit plans must always be included.
  7. The dollar limit of IRC 415 must be reduced at a retirement age below 62.
    True

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