FAQ 518: 415 Limit - Percent of pay limit

Problem:

Why is there a reduction due to 415 maximum for the projected/funding benefit for one of the participants.


Solution:

Because of the way you have the Maximum Benefit screen coded, using exact years, the system is using .7666 times maximum average compensation as the funding benefit limit. If you change the 415 screen to years with 1 hour and the number of days for credit in the first year to 1 leaving the days in retirement year set to the default of 186, the factor will be .8 and you will have no reduction for maximum. I noticed that you have the starting date coded as 2= Plan Years since hire. This should normally be coded 4=BOY Entry for the 415 $ limit reductions to be calculated correctly. The percent of pay limit would then use Plan Years since hire for starting date and the same basis of a year and number of days for credit as the $ limit coding.