                                 CODE OF VIRGINIA

LIMITS ON CREDITABLE COMPENSATION; MAXIMUM BENEFITS; MANDATORY PAYMENT OF
ALLOWANCE (§ 51.1-168)

A. Notwithstanding any other provision of law, creditable compensation used for
computing any benefit or employee contribution under or to the Retirement System
shall not exceed $200,000 (as adjusted in $5,000 increments from time to time by
the adjustment factor described in I.R.C. &#xA7; 415 (d) on the basis of a base
period of the calendar quarter beginning July 1, 2001). In determining average
final compensation for periods beginning on or after July 1, 2001, the limit on
creditable compensation applied to compensation attributable to periods prior to
July 1, 2001, shall be $200,000. Notwithstanding the foregoing, compensation for
any employee who became a member of the Retirement System (i) prior to the
ninetieth day after the opening date of the 1996 Session of the General
Assembly, on whose behalf employee or employer contributions are made into the
Retirement System, and for whom annual compensation is used for computing any
benefit, shall not exceed the limit on compensation as adjusted by the
Commissioner of the Internal Revenue Service pursuant to the transition
provisions applicable to eligible participants under state and local
governmental plans under I.R.C. &#xA7; 401 (a)(17) as amended in 1993 and as
contained in &#xA7; 13212 (d)(3) of the Omnibus Budget Reconciliation Act of
1993 (P. L. 103-66).

B. Notwithstanding any other provision of law, the annual benefit under the
Retirement System of a member and any related death or other benefit shall, if
necessary, be reduced to the extent required by &#xA7; 415 (b) of the Internal
Revenue Code, as adjusted by the Secretary of the Treasury pursuant to &#xA7;
415 (d) of the Internal Revenue Code. Any adjustment pursuant to &#xA7; 415 (d)
of the Internal Revenue Code shall apply to all members including those who have
died, retired, or otherwise terminated service with a nonforfeitable right to a
retirement allowance before the effective date of such adjustment. If an
employee participating in the Retirement System is also a participant in another
defined benefit plan sponsored or maintained by an employer participating in the
Retirement System and subject to the limitations under &#xA7; 415 of the
Internal Revenue Code, such employer shall apply the combined limit test
required by &#xA7; 415 (b) of the Internal Revenue Code to all such plans, to
the extent required by &#xA7; 415 of the Internal Revenue Code. Whenever a
reduction in annual benefits is required to meet the annual benefit limit
required by &#xA7; 415 (b) of the Internal Revenue Code, the annual benefits
under such employer&#8217;s other plan or plans will be reduced before benefits
under the Retirement System.

C. Any vendor for a defined benefit plan sponsored or maintained by an employer
that participates in the Retirement System shall (i) request and maintain the
records needed, (ii) perform the testing services required to assure compliance
with the limitations described in &#xA7; 415 (b) of the Internal Revenue Code,
including testing required where the employer maintains or sponsors another plan
that must be tested together with the Retirement System, and (iii) advise the
employer of any annual benefit 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 limitations described in &#xA7; 415 (b) of the Internal Revenue Code,
including testing required where the employer maintains or sponsors another plan
that must be tested together with the Retirement System, and (c) reduce any
annual benefit that exceeds the applicable limitation.

D. On and after January 1, 1989, the retirement allowance of a member who has
terminated employment shall begin no later than the later of (i) April 1 of the
calendar year following the calendar year that the member attains the required
age as provided in the Internal Revenue Code of 1986, as amended, or (ii) April
1 of the calendar year following the calendar year in which the member
terminates employment. If the member fails, following reasonable notification,
to elect a form of payment by such required beginning date, the retirement
allowance shall be paid as a single life annuity and the spousal acknowledgement
otherwise required by &#xA7; 51.1-165.1 shall not be required. Notwithstanding
any other provisions of law, &#xA7; 401(a)(9) of the Internal Revenue Code, as
amended or renumbered, and the regulations thereunder applicable to governmental
plans are incorporated by reference.

HISTORY: 1990, c. 832; 1995, c. 307; 1998, c. 389; 2000, c. 502; 2002, c. 435;
2005, c. 728; 2015, c. 660; 2021, Sp. Sess. I, cc. 53, 54.