35 IAC 9-1-2 - Introduction
Authority: IC 2-3.5-3-4; IC 5-10-5.5-3; IC 5-10.3-11-2; IC 5-10.5-4-2; IC 33-38-6-23; IC 33-39-7-11; IC 36-8-8-5
Affected: IC 2-3.5; IC 5-10-5.5; IC 5-10.2; IC 5-10.3; IC 5-10.5; IC 33-13-8; IC 33-14-9; IC 36-8
Sec. 2.
(a) OBRA '93
was signed into law on August 10, 1993. Among other things, OBRA '93 contained
amendments to Section 401(a)(17) of the Code relating to the annual
compensation limit for tax-qualified retirement plans. Section 401(a)(17) of
the Code provides an annual compensation limit for each employee under a
qualified plan. This annual compensation limit applies to a plan in two (2)
ways as follows:
(1) A plan may not base
contributions or benefits on annual compensation in excess of the
limit.
(2) The amount of an
employee's annual compensation that may be taken into account in applying
certain specified nondiscrimination rules under the Code is subject to the
annual compensation limit.
(b) Prior to its amendment by OBRA '93, the
annual compensation limit under Section 401(a)(17) of the Code was two hundred
thousand dollars ($200,000), adjusted for cost-of-living increases (two hundred
thirty-five thousand eight hundred forty dollars ($235,840) for 1993), Section
401(a)(17) of the Code was amended by OBRA '93 to reduce the annual
compensation limit to one hundred fifty thousand dollars ($150,000), and to
modify the manner in which cost-of-living adjustments are made to the annual
compensation limit.
(c) OBRA '93,
however, provides a grandfather clause for certain eligible participants in
governmental plans. This grandfather rule applies to individuals who already
were participants in governmental plans before the first plan year beginning
after December 31, 1995, or, if earlier, the first plan year for which the plan
is amended to comply with OBRA '93. Under the grandfather rule, the annual
compensation limit contained in OBRA '93 will not apply to those eligible
participants to the extent that the annual compensation limit in OBRA '93 would
reduce the amount of compensation taken into account under the plan below the
amount that was allowed to be taken into account under the plans as in effect
on July 1, 1993.
Notes
Expiration postponed by Executive Orders #02-22, December 20, 2002, and #03-53, December 30, 2003.
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.