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Section 415(b) provides a percentage of compensation limit and a dollar limitation to test a participant’s straight life annuity on an annual basis for db plans. While we believe that the majority of plans require no amendment on account of the new regulations, some plans will be impacted. The secretary may by regulations limit the application of clause (i), except that such regulations may not limit the period of time by which the annuity starting date precedes the provision of the written explanation other than by providing that the annuity starting date may not be earlier than termination of employment.
The limit on the annual compensation that can be taken into account by qualified plans under code section 417 is increased to $345,000. The internal revenue service (irs) issued updated regulations on the minimum present value requirements for defined benefit plan distributions Any consent by a spouse (or establishment that the consent of a spouse may not be obtained) under the preceding sentence shall be effective only with respect to such spouse.
This table provides the monthly segment rates for purposes of determining minimum present values under section 417 (e) (3) (d) of the internal revenue code.
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