"IRC Section 415 Excess Benefit Plan"
February 2001
Issue No. 2

Background

          Internal Revenue Code (IRC) Section 415 affects the pension of all members who joined STRS on or after January 1, 1990, as well as those whose retirement benefit has been improved by legislation passed after October 14, 1987.

          The maximum benefit currently allowed by Section 415 is $140,000. The maximum is lower for members who retire with a service retirement benefit earlier than age 62. A complete explanation is available on our Web site at www.nystrs.org , under “Active Member Information,” Related Topics.

STRS Proposal

           In 1998, the New York State Legislature authorized STRS to adopt an Excess Benefit Plan that would allow us to pay benefits in excess of the IRC Section 415 limits. In March 1999, we made a formal application to the Internal Revenue Service (IRS) for approval of our plan.

Current Status

          STRS has received a draft of an approval for its Excess Benefit Plan from the IRS. Although we are cautiously optimistic about a final approval, we cannot predict when the IRS will make a decision.

          When the Excess Benefit Plan is formally in place, an announcement will be made on our Web site (see address above) and in our newsletter, Your Source.