19 Del. Admin. Code § 2005-8.0 - Maximum Income Limits. [Compliance with IRS Code Section 401(a)(17); IRS-approved language]

8.1 Effective with respect to plan years beginning on and after January 1, 1996, and before January 1, 2002, the annual compensation of a Plan participant which exceeds $150,000 (as indexed under §401(a)(17)(B) of the Internal Revenue Code of 1986) shall be disregarded for purposes of determining benefits or employee contributions. Effective only for the 1996 plan year, in determining the compensation of an employee eligible for consideration, §414(g)(6) of the Internal Revenue Code of 1986 shall apply, except that in applying such rules, the term "family" shall include only the spouse of the member and any lineal descendants of the employee who have not attained age nineteen (19) before the close of the year.

8.2 Effective with respect to plan years beginning on and after January 1, 2002, the annual compensation of a plan participant which exceeds $200,000, as adjusted for cost-of-living increases in accordance with §401(a)(17)(B) of the Internal Revenue Code of 1986, may not be taken into account in determining benefits or employee contributions for any plan year. Annual compensation means compensation during the plan year or such other consecutive twelve (12) month period over which compensation is otherwise determined under the plan (the determination period). The cost-of-living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year. If the determination period consists of fewer than twelve (12) months, the annual compensation limit is an amount equal to the otherwise applicable annual compensation limit multiplied by a fraction, the numerator of which is the number of months in the short determination period, and the denominator of which is twelve (12). If the compensation for any prior determination period is taken into account in determining a plan participant's contributions or benefits for the current plan year, the compensation for such prior determination period is subject to the applicable annual compensation limit in effect for that prior period.

8.3 The limits referenced in subsections 8.1 and 8.2 above apply only to years beginning after December 31, 1995, and only to individuals who first become plan participants in plan years beginning on and after January 1, 1996. Individuals who become plan participants of before plan years beginning on and after January 1, 1996, are not subject to the limits of §401(a)(17) of the Internal Revenue Code of 1986. Instead, pursuant to §13212(d)(3)(A) of the Omnibus Budget Reconciliation Act of 1993 (OBRA), and the regulations issued under that Section, the annual compensation in effect under §401(a)(17) of the Internal Revenue Code of 1986 does not apply to any such plan participant in any plan year.

Notes

19 Del. Admin. Code § 2005-8.0

25 DE Reg. 272 (9/1/2021) (final)