51.1-126.8 - Maximum contributions to optional plans; coordination of limits. - Virginia Statutes

§ 51.1-126.8. Maximum contributions to optional plans; coordination of limits.

A. Notwithstanding any other provision of law, the annual additions to theoptional retirement plans described in Article 4 (§ 51.1-125 et seq.) ofChapter 1 of this title shall be reduced, if necessary, to the extentrequired by § 415 (c) of the Internal Revenue Code, as adjusted by theSecretary of the Treasury pursuant to § 415 (d) of the Internal Revenue Code.If an employee participating in an optional retirement plan is also aparticipant in another defined contribution plan qualified under §§ 401 (a)or 403 (b) of the Internal Revenue Code and sponsored or maintained by anemployer participating in such optional retirement plan, the employer shallapply the combined limit test required by § 415 (c) of the Internal RevenueCode. Whenever a reduction in annual additions is required to comply with thelimitations of § 415 (c) of the Internal Revenue Code, the annual additionsunder such employer's other plan or plans will be reduced beforecontributions under the optional retirement plan.

B. Any vendor for an optional retirement plan that is a defined contributionplan established by Article 4 of Chapter 1 of Title 51.1 shall (i) requestand maintain the records needed, (ii) perform the testing services requiredto assure compliance with the limitation described in § 415 (c) of theInternal Revenue Code, including testing required where the employermaintains or sponsors another defined contribution plan that must be testedtogether with the optional retirement plan, and (iii) advise the employer ofany contribution that exceeds the applicable limitation. If there is novendor for these services, the employer shall (a) request and maintain therecords needed, (b) perform the testing services required to assurecompliance with the limitation described in § 415 (c) of the Internal RevenueCode, including testing required where the employer maintains or sponsorsanother defined contribution plan that must be tested together with theoptional retirement plan, and (c) reduce any contribution that exceeds theapplicable limitation.

(2002, c. 435.)