offset plan
(4) Definitions relating to paragraph (3) For purposes of paragraph (3)— (A) Maximum excess allowance The maximum excess allowance is equal to— (i) in the case of benefits attributable to any year of service with the employer taken into account under the plan, ¾ of a percentage point, and (ii) in the case of total benefits, ¾ of a percentage point, multiplied by the participant’s years of service (not in excess of 35) with the employer taken into account under the plan. In no event shall the maximum excess allowance exceed the base benefit percentage. (B) Maximum offset allowance The maximum offset allowance is equal to— (i) in the case of benefits attributable to any year of service with the employer taken into account under the plan, ¾ percent of the participant’s final average compensation, and (ii) in the case of total benefits, ¾ percent of the participant’s final average compensation, multiplied by the participant’s years of service (not in excess of 35) with the employer taken into account under the plan. In no event shall the maximum offset allowance exceed 50 percent of the benefit which would have accrued without regard to the offset reduction. (C) Reductions (i) In general The Secretary shall prescribe regulations requiring the reduction of the ¾ percentage factor under subparagraph (A) or (B)— (I) in the case of a plan other than an offset plan which has an integration level in excess of covered compensation, or (II) with respect to any participant in an offset plan who has final average compensation in excess of covered compensation. (ii) Basis of reductions Any reductions under clause (i) shall be based on the percentages of compensation replaced by the employer-derived portions of primary insurance amounts under the Social Security Act for participants with compensation in excess of covered compensation. (D) Offset plan The term “offset plan” means any plan with respect to which the benefit attributable to employer contributions for each participant is reduced by an amount specified in the plan.
Source
26 USC § 401(l)(4)
Scoping language
None identified, default scope is assumed to be the parent (subpart A) of this section.