415(b) Maximum paid after social security retirement age

[Guest Marino13]

I have a plan where normal retirement is defined as age 65 with 5 years of plan participation. I have a plan participant whose normal retirement age is 69 and whose social security retirement age is 65. How do I increase the 415(B) limit for the fact that his retirement age is past his social security retirement age?

Do I take the lesser of (1) the actuarial equivalent 415(B) limit using the plan actuarial equivalence or (2) the actuarial equivalent 415(B) limit using the GATT rate as of the first day of the plan year ???

[Blinky the 3-eyed Fish]

The 415 dollar limit past SSRA is the lesser of the result using the plan's AE or 5% and the applicable mortality table. However, if the plan has adopted EGTRRA or the 415 code section is referenced by the plan document, a participant's SSRA no longer comes into play. Instead the increase applies to ages past 65. Also, there is the new applicable mortality table to consider.

[Guest Marino13]

Blinky,

The plan has adopted EGTRRA. So I am only increasing from age 65 and I use the lesser of the result based on plan AE or 5% using GATT or GAR??? My valuation date is 1/1/2002.

[Blinky the 3-eyed Fish]

The fact that you are performing a valuation adds a degree of complexity. To know how to direct you tell me:

When was the EGTRRA amendment concering the 415 limitations effective as of?

Was the model amendment in Rev. Rul 2001-62 adopted?

If so, when is the 94 GAR effective date?

[Guest Marino13]

The EGTRRA amendment was adopted effective 1/1/2002.

The GAR 94 effective date is not until 1/1/2003.

[MGB]

It makes a difference when the amendments are adopted, not just when they are effective.

Also, the GAR94 effective date cannot be 1/1/03, it must be a date in 2002 and must be adopted in 2002.

[Blinky the 3-eyed Fish]

MGB is right, but I presumed that the amendments were adopted in 2002. That being said, you would have the option of recognizing the EGTRRA amendment for the 1/1/02 valuation date. If you choose to recognize it, use the new methodology in increasing the 415 limits; otherwise use the old limits. If the adoption of the EGTRRA amendment is in 2001, it must be recognized for the valuation.

Because the 94 GAR effective date is not 1/1/02, you will not use it as the applicable mortality table.