N.J. Admin. Code § 17:1-17.3

Current through Register Vol. 56, No. 23, December 2, 2024

Section 17:1-17.3 - Compliance with 26 U.S.C. 401(a)(17) for the limitation on compensation

(a) Pursuant to 43:3C-9.3 and 9.4, effective with respect to plan years beginning on and after July 1, 2002, the annual compensation of a plan member that exceeds $ 200,000 (as adjusted for cost-of-living increases in accordance with 26 U.S.C. § 401(a)(17)(B) may not be taken into account in determining benefits or contributions due for any plan year. Annual compensation means compensation during the plan year or such other consecutive 12-month period over which compensation is otherwise determined under the plan, referred to as 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 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 12. If the compensation for any prior determination period is taken into account in determining a plan member'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.

(b) For members enrolled prior to July 1, 1996, (except members of the Defined Contribution Retirement Plan) the annual compensation limit in 26 U.S.C. 401(a)(17) shall not apply, if the employer of the member at retirement filed the necessary certification prior to July 1, 1997, with the Division of Pension and Benefits.

(c) The determination period under this section is the calendar year.

N.J. Admin. Code § 17:1-17.3