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 the General \ Compensation \ Maximum Benefit (MAXBEN) screen is coded, with Basis of Year set to 1 - Exact Years, the system is using 0.7666 times maximum average compensation as the funding benefit limit. If you change the MAXBEN screen to set Basis of Year field to 1 - 1 hour and the Days in First Year field to 1, and leave Days in Retirement Year set to the default of 186, after running Calculations > Valuation, the factor will be 0.8 and you will have no reduction for maximum. Note, that if you have the Starting Date coded as 2 - Plan Years since hire, it should be coded as 4 - BOY Entry instead 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.