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1.415(b)-1(c)(5) states that an automatic benefit increase can essentially be disregarded when applying the 415 dollar limit to a benefit if 1) the benefit is paid in a form to which section 417(e)(3) does not apply, 2) the plan satisfies other requirements. I have a plan that provides for an accelerated form of payment (a Social Security Level Income Option), but otherwise satisfies all of the requirements of the above section. The catch is that this is a governmental plan that is exempt from the requirements of 417(e). Does a form of payment that would otherwise be subject to 417(e)(3) no longer fail the above exception by virtue of being paid from a governmental plan?

I've got a plan with a participant over the dollar limit late in life - this participant wants a lump sum benefit. i don't generally deal with anything other than compensation limit issues, but advanced age (late retirement increase) and generous plan features (subsidized lump sum) are the culprit here - the basic plan is not intended to be generous enough to create limit issues. My question is, if the participant in question is something like 69 and 6 months, is there any guidance on what is acceptable for non-integer ages in terms of calculating the increased (post-65) dollar limit. E.g., if the age 69 calculated limit is $3.2MM and the age 70 calculated limit is $3.4MM (for a lump sum payment form): 1) Is interpolation appropriate/allowed/required? 2) if so, is anything reasonable OK (pro rata in this case vs. a direct calculation at actual age yields a tiny difference. let's say for the sake of discussion that one would be 3.3MM and the other might be $3,301,000) Sensitivity is heightened since the payment form is a lump sum and the participant's separation of employment is far from amicable. (the plan document only has boilerplate language, so method isn't specified, and there is no precedent set administratively because this is the first participant in a very large plan who has ever tripped the dollar limit). No pre-termination issues with lump sum size, the plan is far too large for that.