A participant has a DB fraction of .6 and has 5 years of participation at retirement. I thought that the benefit calculated at retirement is .6*.5*130,000 or 39,000. A friend of mine says that it should be the lesser of .6 or .5 (.5 in this case) times 130,000. Is this correct? I cannot find any citation on this.

For 415(e), reduce the DB $ Limit for YOS < 10 rather than YOP < 10 (as in 415(B)).

Bingo!

Thanks, David.

I think that David is mistaken. You should use projected years of participation to normal retirement age to calculate the dollar limitation portion of the DB fraction.

The YOS<10 reduction to the DB $ limit in a 415(e) combined plan limit calculation was part of TAMRA(1988).

I learned something new. David, you are right. Thanks for setting me straight.