Sec. 1-116. Federal contribution and benefit limitations.

253 words·~1 min read·/il/chapter-40/act-5/1-116

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(a)This Section applies to all pension funds and retirement systems established under this Code.

(a-5) All pension funds and retirement systems established under this Code shall comply with the applicable contribution and benefit limitations imposed by Section 415 of the U.S. Internal Revenue Code of 1986 for tax qualified plans under Section 401(a) of that Code.

(b)If any benefit payable by a pension fund or retirement system subject to this Section exceeds the applicable benefit limits set by Section 415 of the U.S. Internal Revenue Code of 1986 for tax qualified plans under Section 401(a) of that Code, the excess shall be payable only from an excess benefit fund established under this Section in accordance with federal law.

(c)An excess benefit fund shall be established by any pension fund or retirement system subject to this Section that has any member eligible to receive a benefit that exceeds the applicable benefit limits set by Section 415 of the U.S. Internal Revenue Code of 1986 for tax qualified plans under Section 401(a) of that Code. Amounts shall be credited to the excess benefit fund, and payments for excess benefits made from the excess benefit fund, in a manner consistent with the applicable federal law.

(d)For purposes of matters relating to the benefit limits set by Section 415 of the U.S. Internal Revenue Code of 1986, the limitation year may be defined by each affected pension fund or retirement system for that fund or system.