State Teachers Retirement System - Distributions - Maximum permissible benefits.


Published: 2019-06-07

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Applicability of the final 415 regulations effective beginning on the limitation year commencing on January 1, 2008.

(A) In general. The final regulations for section 415 of the "Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C. 401, as amended ("final regulations") were made applicable to distributions to members and beneficiaries as of January 1, 2008. As of the last effective date of this rule, the final regulations are incorporated by reference.

(B) Pursuant to section 3307.58 of the Revised Code and section 415 of the Internal Revenue Code, the maximum annual benefit distributed to a member or beneficiary under the defined benefit plan and/or the combined plan shall be determined as of the date the benefit commences, except as otherwise set forth in section 3307.46 of the Revised Code, and shall be limited to the maximum amount permitted under section 415(b)(1)(A) of the Internal Revenue Code, as adjusted in accordance with section 415(d) of the Internal Revenue Code, for the limitation year.

(C) Any adjustments applicable to governmental plans (as defined in section 414(d) of the Internal Revenue Code) that are required or permitted under section 415(b) of the Internal Revenue Code shall be applied in calculating the maximum annual benefit, except that the adjustment for commencement after age 65 under section 415(b)(2)(D) and the minimum benefit permitted by section 415(b)(4) of the Internal Revenue Code shall not apply.

(D) The application of the provisions of this rule shall not cause the maximum annual benefit provided to a member under the defined benefit plan to be less than the member's accrued benefit as of December 31, 2007 under provisions of Chapter 3307. of the Revised Code and division 3307:1 of the Administrative Code that were both adopted and in effect prior to April 5, 2007.

(E) To the extent section 415(c) of the Internal Revenue Code applies to contributions made to the defined contribution plan or the combined plan, the annual contributions made to the member's account by the member or the member's employer shall be subject to the limits of section 415(c) of the Internal Revenue Code, which limits shall be adjusted in accordance with section 415(d) of the Internal Revenue Code. For this purpose, compensation shall mean compensation as defined in section 415(c)(3) of the Internal Revenue Code and section 1.415-2(d)(3) of the final regulations, and effective January 1, 2009, compensation shall include differential wage payments as defined in section 3401(h)(2) of the Internal Revenue Code.

(F) The limitation year under this rule shall be the calendar year.