La. Admin. Code tit. 58 § III-1517

Current through Register Vol. 50, No. 11, November 20, 2024

Section III-1517 - Benefit Limitation

A. Annual additions with respect to a member shall not exceed the lesser of $40,000 (as adjusted pursuant to IRC §415(d) percent of the member's compensation.

1. For purposes of this Section, the following definition shall apply.

Annual Additions-the sum (for any year) of employer contributions to a defined contribution plan, member contributions, and forfeitures credited to a member's individual account. Member contributions are determined without regard to rollover contributions and to picked-up employee contributions that are paid to a defined benefit plan.

2. For purposes of applying IRC §415(c) and for no other purpose, the definition of compensation where applicable will be compensation actually paid or made available during a limitation year, except as noted below and as permitted by treasury regulation §1. 415(c)-2, or successor regulation; provided, however, that member contributions picked up under IRC §414(h) shall not be treated as compensation.

3. Compensation will be defined as wages within the meaning of IRC §3401(a) and all other payments of compensation to an employee by an employer for which the employer is required to furnish the employee a written statement under IRC §6041(d) and will be determined without regard to any rules under IRC §3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed [such as the exception for agricultural labor in IRC §3401(a)(2)].

a. However, for limitation years beginning after December 31, 1997, compensation will also include amounts that would otherwise be included in compensation but for an election under IRC §§125(a), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b).

b. For limitation years beginning after December 31, 2000, compensation shall also include any elective amounts that are not includible in the gross income of the member by reason of IRC §132(f)(4)

B. For limitation years beginning on and after January 1, 2009, compensation for the limitation year shall also include compensation paid by the later of two and one-half months after a member's severance from employment or the end of the limitation year that includes the date of the member's severance from employment if the payment is regular compensation for services during the member's regular working hours, or compensation for services outside the member's regular working hours (such as overtime or shift differential), commissions, bonuses or other similar payments, and, absent a severance from employment, the payments would have been paid to the member while the member continued in employment with the employer.

C. Any payments not described in Subsection B of this Section are not considered compensation if paid after severance from employment, even if they are paid within two and one-half months following severance from employment, except for payments to the individual who does not currently perform services for the employer by reason of qualified military service [within the meaning of IRC §414(u)(1)] to the extent these payments do not exceed the amounts the individual would have received if the individual had continued to perform services for the employer rather than entering qualified military service.

D. An employee who is in qualified military service [within the meaning of IRC §414(u)(1)] shall be treated as receiving compensation from the employer during such period of qualified military service equal to:

1. the compensation the employee would have received during such period if the employee were not in qualified military service, determined based on the rate of pay the employee would have received from the employer but for the absence during the period of qualified military service; or

2. if the compensation the employee would have received during such period was not reasonably certain, the employee's average compensation from the employer during the twelve month period immediately preceding the qualified military service (or, if shorter, the period of employment immediately preceding the qualified military service).

E. Back pay, within the meaning of treasury regulation §1. 415(c)-2(g)(8), shall be treated as compensation for the limitation year to which the back pay relates to the extent the back pay represents wages and compensation that would otherwise be included under this definition.

F. If the annual additions for any member for a plan year exceed the limitation under IRC §415(c), the excess annual addition will be corrected as permitted under the employee plans compliance resolution system (or similar IRS correction program).

G. For limitation years beginning on or after January 1, 2009, a member's compensation for purposes of this Paragraph shall not exceed the annual limit under IRC §401(a)(17)

La. Admin. Code tit. 58, § III-1517

Promulgated by the Department of the Treasury, Board of Trustees of the Teachers' Retirement System of Louisiana, LR 402278 (11/1/2014).

AUTHORITY NOTE: Promulgated in accordance with R.S. 11:921-929.