Actuarial Outpost Calculating the Post-Egtrra 415(b)(1)(A) DB limit
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#1
10-06-2017, 04:06 PM
 Noumenon84 Philosopher King Join Date: Jan 2009 Studying for FAP.... eventually Posts: 963
Calculating the Post-Egtrra 415(b)(1)(A) DB limit

I was just asked to estimate the 2018 limit, which based on a few resources I found (one being Mercer), indicate that it will be increasing to \$220k.

I haven't calculated this before, but I was given a file with the prior year calculation. I just have one question that I hope is simple. I see one part of the calculation is to divide the sum of the prior year's reported CPI - U in Q3 by what the file I was given refers to as "Base Quarter 2001 Q3", which is \$533.3. Is this constant from year to year as part of the definition of the 415 limit or do I need to update this parameter? If so, what is this and where does it come from?

Thanks!
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#2
11-09-2017, 11:21 AM
 Scheng1234 SOA Non-Actuary Join Date: Dec 2016 College: CPP baccalaureate Posts: 1

I just use the IRS COLA tables. Lots of handy limits provided there.

https://www.irs.gov/pub/irs-tege/cola_table.pdf
#3
11-10-2017, 01:04 PM
 StillCrazed Member ASPPA COPA Join Date: Sep 2016 Posts: 80

When you look back to the legislated \$90,000 amount, you will note that the base is fixed from that indexing date. Don't change it.