27D. Permitted disparity with respect to employer-provided benefit - fully insured

Statement of Requirement: Code §§I RC 412(e)(3); Treas. Reg. § 1.401(a) (4)-3(b)(5); Rev. Proc. 2017-41, sec.6.03(15 2023-37, 10.02(2)(k)

Document Provision: _____

(Note to reviewer: If a defined benefit plan is a fully insured plan within the meaning of

229 | Defined Benefit Plan LRM Package 08/2020 06/2026

Code § IRC 411(b)(1)(F) and Code § IRC 412(e)(3) (LRM #32), the plan satisfies the permitted disparity rules of Code § IRC 401(l) if each participant’s benefit under the plan’s benefit formula satisfies the permitted disparity rules applicable to defined benefit plans, including any required reductions to the maximum excess allowance, or, if applicable, the maximum offset allowance. However, the applicable factor as determined from Tables I or II in section B of LRM #27 must be further reduced by multiplying it by a factor of 0.80. Note that no further adjustments for benefits beginning at a time other than normal retirement age (see LRM #27B) are required for Code § IRC 412(e)(3) plans.)