Md. Code Regs. 22.07.02.03
Current through Register Vol. 52, No. 1, January 10, 2025
Section 22.07.02.03 - Compliance with the Internal Revenue Code, 26 U.S.C. Section415 Limitations on Contributions and BenefitsA. Notwithstanding the terms of the Annotated Code of Maryland or the Code of Maryland Regulations (COMAR), the member contributions paid to and retirement benefits paid from, the plan shall be limited as necessary to conform to the requirements of § 415 of the Internal Revenue Code for a qualified pension plan.B. Member Limits. (1) The annual benefit to which a member is entitled, during the limitation year (fiscal year), is limited to $160,000, as adjusted for cost-of-living increases under § 415(d) of the Internal Revenue Code.(2) For certain members, this limit is adjusted based upon the age of the member at retirement if the member retires before 62 years old.(3) The limitation is not lowered for qualified police and firefighters as defined by the Internal Revenue Code.(4) The limitation is not lowered for a member who retires on disability or for a death benefit.C. If a member selects an optional benefit form that is other than a straight life annuity, the benefit shall be adjusted to an actuarially equivalent straight life annuity for purposes of applying the limitation in §B of this regulation.D. If a member has fewer than 10 years of service at the time the member begins receiving a retirement benefit, the limitation in §B of this regulation is reduced by a fraction, which is the number of years of service divided by 10.E. After-tax employee contributions in any limitation year are limited to the lesser of 100 percent of a member's compensation, or $40,000 adjusted for cost-of-living increases pursuant to § 415(d) of the Internal Revenue Code. The definition of compensation used for testing purposes shall satisfy the requirements of § 415(c)(3) of the Internal Revenue Code and does not include picked-up contributions.F. The State system does not take into account, for limitation purposes, any repayment of contributions and earnings that were previously refunded due to a forfeiture of service under § 415(k)(3) of the Internal Revenue Code.G. The State system does permit after-tax employee contributions for service purchase subject to § 415(n) of the Internal Revenue Code.H. Picked-up contributions are not subject to these limits.I. If a member participates in more than one defined contribution plan of an employer, or more than one defined benefit plan of an employer, then the contributions to all plans and the benefits payable from all plans are aggregated for purposes of this regulation. If the limits are exceeded, then the contributions to, or the benefits payable from, the State system are considered primary.Md. Code Regs. 22.07.02.03