Limitation on Benefits
A defined benefit plan must contain a limit on the projected “annual benefit” under the plan or under all such plans aggregated if the employer has more than one defined benefit plan
( Q 3868, Q 3719).
Accrued Benefit Requirements
A defined benefit pension plan may not exclude from participation employees who are beyond a specified age, but the benefit of an employee who is within five years of normal retirement age when employment begins is computed using a retirement age that is the fifth anniversary of the time that plan participation begins for that employee.1 A defined benefit plan must benefit a minimum number or percentage of employees (i.e., the 50/40 test) as explained in Q 3717.
Accrued Benefit Requirements for Not Fully Insured Plans