qualified cost-of-living arrangement

(B)For purposes of this paragraph, the term “qualified cost-of-living arrangement” means an arrangement under a defined benefit plan which— (i)provides a cost-of-living adjustment to a benefit provided under such plan or a separate plan subject to the requirements of section 412, and (ii)meets the requirements of subparagraphs (C), (D), (E), and (F) and such other requirements as the Secretary may prescribe. (C)An arrangement meets the requirement of this subparagraph only if the cost-of-living adjustment of participants is based— (i)on increases in the cost-of-living after the annuity starting date, and (ii)on average cost-of-living increases determined by reference to 1 or more indexes prescribed by the Secretary, except that the arrangement may provide that the increase for any year will not be less than 3 percent of the retirement benefit (determined without regard to such increase). (D)An arrangement meets the requirements of this subparagraph only if it is elective, it is available under the same terms to all participants, and it provides that such election may at least be made in the year in which the participant— (i)attains the earliest retirement age under the defined benefit plan (determined without regard to any requirement of separation from service), or (ii)separates from service. (E)An arrangement shall not meet the requirements of this subparagraph if the Secretary finds that a pattern of discrimination exists with respect to participation. (F) (i)An arrangement shall not meet the requirements of this paragraph if any key employee is eligible to participate.

Source

26 USC § 415(k)(2)(B)


Scoping language

For purposes of this paragraph
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