A. Notwithstanding any other provision of law, the annual additions to the optional retirement plans described in Article 4 (§ 51.1-125 et seq.) of Chapter 1 of this title shall be reduced, if necessary, to the extent required by § 415 (c) of the Internal Revenue Code, as adjusted by the Secretary of the Treasury pursuant to § 415 (d) of the Internal Revenue Code. If an employee participating in an optional retirement plan is also a participant in another defined contribution plan qualified under §§ 401 (a) or 403 (b) of the Internal Revenue Code and sponsored or maintained by an employer participating in such optional retirement plan, the employer shall apply the combined limit test required by § 415 (c) of the Internal Revenue Code. Whenever a reduction in annual additions is required to comply with the limitations of § 415 (c) of the Internal Revenue Code, the annual additions under such employer’s other plan or plans will be reduced before contributions under the optional retirement plan.
B. Any vendor for an optional retirement plan that is a defined contribution plan established by Article 4 of Chapter 1 of Title 51.1 shall (i) request and maintain the records needed, (ii) perform the testing services required to assure compliance with the limitation described in § 415 (c) of the Internal Revenue Code, including testing required where the employer maintains or sponsors another defined contribution plan that must be tested together with the optional retirement plan, and (iii) advise the employer of any contribution that exceeds the applicable limitation. If there is no vendor for these services, the employer shall (a) request and maintain the records needed, (b) perform the testing services required to assure compliance with the limitation described in § 415 (c) of the Internal Revenue Code, including testing required where the employer maintains or sponsors another defined contribution plan that must be tested together with the optional retirement plan, and (c) reduce any contribution that exceeds the applicable limitation.
History
2002, c. 435.
