Form 6044 - Employee Plan Deficiency Checksheet - 2006 Page 3
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4631,632,633
Section
of the plan must provide that the compensation limitation and the $10,000 minimum
limitation, if provided, must be reduced where a participant has less than 10 years of service with the
employer at the time the participant begins to receive retirement benefits under the plan, and that the maximum
Ill.i., j.
dollar limitation must be reduced where a participant has less than 10 years of participation when retirement
benefits under the plan commence. The plan should provide that these adjustments are made by multiplying the
applicable limitations by the appropriate fraction:
(i) For the compensation and $10,000 minimum limitations:
Years of service with the employer as of, and including, the current limitation year, divided by 10
(ii) For the maximum dollar limitations:
Years of participation with the employer as of, and including, the current limitation year, divided by 10
IRC section 415(b)(5), Regs. section 1.415-3(g), Notice 87-21, 1987-1 C.B. 458 Q&A 7, Notice 89-45, 1989-1 C.B.
684 and Rev. Proc. 92-42, 1992-1 C.B. 72.
634,635
Section
of the plan must provide that all defined benefit plans of the employer, whether or
not terminated, will be treated as one defined benefit plan for purposes of the limitations under IRC section
415(b). Otherwise each of the defined benefit plans must contain provisions which limit each so that
Ill.k.
the possibility is precluded that the aggregate defined benefit plan may exceed the limitations of section 415(b).
Where the employer is a member of a controlled group of corporations or commonly controlled trades or
businesses, or a member of an affiliated service group within the meaning of sections 414(b), (c) or (m) and 415(g)
and (h), the plan must provide that all such employers are treated as a single employer for purposes of the plan's
application of the section 415 limitations. IRC sections 415(f)(1)(A) and 414(m)(4), and Regs. sections 1.415-8(a)(1)
and 1.401(a)-1(b)(1)(iii).
636,637
Where the employer maintains or has maintained a defined contribution plan and maintains or
has maintained a defined benefit plan, either of which has covered or may in the future cover the same
participants, whether or not concurrently, the plans must preclude the possibility that the sum of the defined benefit
IV.a.
plan fraction and the defined contribution plan fraction for all qualified plans maintained by the employer for each
common participant will exceed 1.0. Otherwise each plan must preclude the possibility that the aggregate of the
plan will exceed the limitations of section 415(e) of the Code. The part of a qualified defined benefit plan maintained
by the employer to which employee contributions are made is considered a separate defined contribution plan for
this purpose. Section
of the plan should be amended accordingly. IRC sections 415(e), 415(e)(6)(c)
and 416(h)(4) and Notice 83-10, 1983-1 C. B. 536, G-8, G-9, and G-12.
638
In the case of a top-heavy plan that does not meet the requirements of section 416(h)(2) of the Code,
the denominators of the defined benefit and defined contribution plan fractions (as described in section
415(e)) are computed by substituting a factor of 1.0 for 1.25. Section
of the plan should be amended
IV.b.
accordingly. IRC section 416(h) and Notice 83-10, G-12, 1983-1 C.B. 536.
639
The amendment (proposed or adopted) to preclude benefit increases that would otherwise occur when the
repeal of section 415(e) becomes effective for the plan is not acceptable and must be removed because:
(1) it was not timely adopted and/or effective; or (2) it was not properly worded to be in accordance with Q&A-7 in
IV.c.
Notice 99-44.
640
In order to take the repeal of section 415(e) into account, the plan must be amended to eliminate all
provisions relating to section 415(e). Such amendments must be effective no earlier than the first day of
the first limitation year beginning in 2000.
IV.d.
662
In order to provide benefit increases to reflect the repeal of section 415(e) for current or former employees,
the current or former employees must be participants with an accrued benefit (other than an accrued
benefit arising solely from the repeal of section 415(e)) under the plan on or after the plan's effective date of the
IV.e.
section 415(e) repeal. The plan must be amended to reflect the requirement of the preceding sentence.
641
A plan in existence on May 6,1986 (pre-TRA '86 plan), will not be disqualified for any limitation
year beginning before January 1, 1987, merely because such plan provides for annual additions or annual
benefits which exceed the limitations of IRC section 415 as amended by TRA '86. These pre-TRA '86 plans must,
V.a.
however, comply with section 415 as in effect before amendment by TRA '86 for all pre-1987 limitation years.
Section
of the plan should be amended accordingly. Section 1106(i)(3) of Pub. L. 99-514 (TRA '86)
and Notice 87-21, 1987-1 C.B. 458, Q&A 12.
Catalog Number 43038M Page 3 of 4
Form 6044 (Rev. 3-2006)
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