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

Statement of Requirement: IRC 412(e)(3); Treas. Reg. 1.401(a)(4)-3(b)(5); Rev. Proc. 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 IRC 411(b)(1)(F) and IRC 412(e)(3) (LRM #32), the plan satisfies the permitted disparity

59 | Defined Benefit Plan LRM Package 06/2026

rules of 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 IRC 412(e)(3) plans.)