How do 415 limits apply in a preretirement survivor situation of two different fae db plan benefits?

[gle3186]

Plan 1 with a lump sum survivor benefit.

The participant dies in her mid 40s with an age 65 sla that she could have accrued limited to $160,000. The calculation of the lump sum survivor benefit in the Plan assumes the participant terminated employment at the end of the month following death and received payment immediately (even if earlier than the earliest commencement date otherwise available). The lump sum is calculated at her age of death. For the 415 test, we convert this hypothetical lump sum to a sla at age of death. We then reduce the $160,000 limit to a limit at her age of death and if the limit is exceeded, we reduce the hypothetical lump sum until the sla equivalent equals the limit. From that sla (reduced if necessary), we compute the lump sum and pay the beneficiary.

Plan 2 with a qualified preretirement surviving spouse annuity (qprssa) feature but no lump sum survivor benefit and the qprssa is not available until the participant would have been age 55 or older.

Same scenario as above with respect to age of participant at death. The participant's 415 limited age 65 sla is fixed at death at no more than $160,000. Not knowing if the spouse will take the benefit at age 55 (or later), we can't run the 415 test as of the date of death of the participant. The spouse decides to take the benefit at the participant's age 55. We would develop a hypothetical scenario where the participant terminated just prior to death and elected a 50% J&S with the spouse as beneficiary commencing at her age 55 and died right after commencing the benefit. We would reduce the $160,000 limit to the limit at the participant's age 55. If the life annuity that would have been paid to the participant under the hypothetical 50% joint and survivor exceeds the reduceed limit, we would reduce the participant's hypothetical benefit until it was equal to the reduced 415 limit. The spouse (beneficiary) would be paid a life annuity equal to 50% of the participant's 415 limited hypothetical lifetime benefit.

Does all of this sound correct? There doesn't seem to be much (any?) authoritative guidance on this unless someone can direct us to such. 415 is a limit on a participant's accrual but testing is done on a a benefits delivery basis and teseting is done at the participant level, not the survivor (we think).

[Blinky the 3-eyed Fish]

Does all of this sound correct?

How about posting some numerical examples? It's hard to follow your methodology in your description.

415 is a limit on a participant's accrual but testing is done on a a benefits delivery basis and teseting is done at the participant level, not the survivor (we think).

I am not sure what you mean by this. You are right though that the 415 limit is applied to the participant not the beneficiary.