                                 CODE OF VIRGINIA

MAXIMUM CONTRIBUTIONS TO OPTIONAL PLANS; COORDINATION OF LIMITS (§ 51.1-126.8)

A. Notwithstanding any other provision of law, the annual additions to the
optional retirement plans described in Article 4 (&#xA7; 51.1-125 et seq.) of
Chapter 1 of this title shall be reduced, if necessary, to the extent required
by &#xA7; 415 (c) of the Internal Revenue Code, as adjusted by the Secretary of
the Treasury pursuant to &#xA7; 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 &#xA7;&#xA7; 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 &#xA7; 415 (c) of the Internal Revenue Code.
Whenever a reduction in annual additions is required to comply with the
limitations of &#xA7; 415 (c) of the Internal Revenue Code, the annual additions
under such employer&#8217;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 &#xA7; 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 &#xA7; 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.