§ 2. Limitation on annual benefit.  


Latest version.
  • (a)

    A Participant's annual benefit for a calendar year (the "limitation year") shall not exceed a dollar amount established in Code Section 415(b)(1)(A), which is adjusted for inflation based on Section 215(i)(2)(A) of the Social Security Act. If a Participant's total annual benefits are not in excess of $10,000.00, this Section will not apply. Furthermore, if the Participant retires before age 62, the limit shall be actuarially reduced in accordance with paragraph (b) below.

    (b)

    To the extent required by Code Section 415(b), in no event shall the aggregate annual benefit provided under all defined benefit plans of the Employer for any Participant exceed an amount equal to $90,000.00 as adjusted pursuant to Code Section 415(d)(1)(A). If the retirement income benefit under the Plan begins before age 62, the determination as to whether the $90,000 limitation has been satisfied shall be made by reducing the $90,000.00 limitation so that such limitation (as so reduced) equals an annual benefit (beginning when such retirement income benefit begins) which is equivalent to a $90,000.00 annual benefit beginning at age 62. The age reduced dollar limit shall be the lesser of the equivalent amount computed using the actuarial table in Article XII, Section 1 of the Plan for actuarial equivalence for early retirement benefits, and the amount computed using five percent interest and the applicable mortality table (to the extent that the mortality decrement is used prior to age 62). The reduction under this paragraph (b) shall not reduce the $90,000.00 limitation below (i) $75,000.00 if the benefit begins at or after age 55, or (ii) if the benefit begins before age 55, the equivalent of the $75,000.00 limitation for age 55. If the retirement income benefit under the Plan begins after age 65, the determination as to whether the $90,000.00 limitation has been satisfied shall be made by increasing the $90,000.00 limitation so that such limitation (as so increased) equals an annual benefit (beginning when such retirement income benefit begins) which is equivalent to a $90,000 annual benefit beginning at age 65. The age increased dollar limit shall be the lesser of the equivalent amount computed using the actuarial table in Article XII, Section 6 of the Plan to determine the actuarial equivalent of late retirement benefits, and the amount computed using five percent interest and the applicable mortality table.

    (c)

    For distributions made in any form other than a straight life annuity or a joint and 50 percent survivor annuity, such benefit shall be adjusted to a straight life annuity, beginning at the same age, which is the actuarial equivalent of such benefit. Prior to the first day of the first limitation year beginning in 1995, in order to determine the actuarial equivalence of different forms of benefit payment, the interest rate assumptions shall not be less than the greater of five percent or the rate specified in the Plan for determining actuarial equivalence for the particular form of retirement benefit. For limitation years beginning on or after January 1, 1995 (and for employers who have elected to treat these rules as being effective on an earlier date that is on or after December 31, 1994), the actuarially equivalent straight life annuity for purposes of applying the limitations under Code Section 415(b) to benefits is equal to the greater of the equivalent annual benefit computed using the interest rate and mortality table, or tabular factor, specified in the Plan for actuarial equivalence for the particular form of benefit payable, and the equivalent annual benefit computed using a five percent interest rate assumptions and the applicable mortality table.

    (d)

    Limitations on benefits under Code Section 415(b) shall not apply where the total annual benefits payable to a Participant under this Plan and all other qualified defined benefit plans of the Employer do not exceed $10,000.00 in the aggregate. This minimum limitation is not applicable for a Participant whose Employer maintains or has maintained a defined contribution plan in which such Participant participated.

    (e)

    The $10,000.00 minimum limitation, if provided, must be reduced where a Participant has less than ten years of service with the Employer at the time the Participant begins to receive retirement benefits under the Plan, and the maximum dollar limitation must be reduced where a Participant has less than ten years of participation when retirement benefits under the Plan commence. These adjustments are made by multiplying the applicable limitations by the appropriate fraction:

    i.

    For the $10,000.00 minimum limitation—Years of service with the employer as of and including, the current limitation year/10

    ii.

    For the maximum dollar limitation—Years of participation with the employer as of and including, the current limitation year/10