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Regulatory Data

The Regulatory Data dialog box contains tabbed sections that direct you to the parameters pertaining to regulatory data items. These parameters are listed here by the tabbed section in which you will find them and details about them are provided in separate sections of this article below the list:

U.S. Maximums

U.S. Social Security

Canada

U.K.

The Regulatory Data dialog box also provides access to a list of ProAdmin’s historical data, via the Historical Data button; click it to view (and print, if you wish) a list, by calendar year, of Historical Regulatory Data for the relevant tab as contained in ProAdmin. If you wish to view all historical data, click the arrow next to the button and request the listing for All Data. Published regulatory data values are listed, including rounded values for unrounded limits.

You may enter overrides of ProAdmin’s historical data for years that are displayed in the list. To add or override values, select the appropriate tab and complete its parameters.

As an alternative to overriding regulatory data manually, you may override by use of the regulatory data text files that, beginning with version 2.23 of ProAdmin, are included in the ProAdmin system files, ProAdmin needs to retrieve historical regulatory data and will try to get the data from the following eight text files:

RegMaxBen.txt U.S. IRC Section 415 maximum benefit
RegMaxComp.txt U.S. IRC Section 401(a)(17) maximum compensation
RegWageBase.txt U.S. Social Security wage base
RegCPI.txt U.S. Social Security CPI
RegNatAvgWage.txt U.S. Social Security national average wage
RegCanYMPE.txt Canadian YMPE
RegCanMax.txt Canadian ITA maximum pension
RegUKLEL.txt U.K. Lower Earnings Limit

To find these files, ProAdmin will search through the following three directories in the order listed below:

Client directory location of the library files for the currently open ProAdmin client
User directory location of the user’s ProAdmin configuration file, PROADMIN.ini
System directory location of the ProAdmin application files

The standard location for these files is the system directory. The use of any other directory may be problematic if any calculations are intended to be processed through a Repository using ProAdmin Server. The file names are reserved. Please be sure that you have not used these file names for another purpose in any of the directories listed above. If the files cannot be found in any of those directories, ProAdmin will use a copy of the last used regulatory data stored in the ProAdmin client.

Details for each tab are discussed separately, as follows:

U.S. Maximums

For guidance, see Internal Revenue Code (IRC) sections 401(a)(17) and 415(b), relevant regulations and any applicable Internal Revenue Service Notices, Revenue Rulings, etc..

The U.S. Maximums tab allows you to enter Overrides to ProAdmin’s Historical Regulatory Data values and/or add them. Enter each value, by the Year to which it applies, in the Maximum Benefit dollar limit, Unrounded, column and/or the Maximum Compensation limit, Unrounded, column; ProAdmin determines the Rounded limits and displays them to the right of the unrounded limits. It is the unrounded limits, however, that are projected to future decrement dates (and then rounded). (An override entered here for Maximum Compensation does not apply to a custom regulatory table of the Compensation Limit Type.)

The U.S. Maximums tab allows you to apply the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA, or the 2001 Tax Act) to the IRC section 415(b) maximum benefit dollar limit and section 401(a)(17) compensation limit, respectively. See our Technical Reference article entitled "U.S. Internal Revenue Code Section 415 limits" for details about computation of actuarial equivalence of 415(b) dollar limits under both EGTRRA and prior law. If your benefit determination date is after 1/1/2001, you must check the Apply 2001 Tax Act actuarial equivalence and rounding provisions box if you wish to reflect:

  1. EGTRRA’s adjustment of the IRC section 415(b) maximum benefit dollar limit for a benefit commencing at an age younger than 62 or older than 65, and

  2. EGTRRA’s change in rounding rule for the IRC section 401(a)(17) compensation limit from use of $10,000 intervals to use of $5,000 intervals (i.e., the same rounding rule as used for the IRC section 415(b) maximum benefit dollar limit) to determine limits for years after 2002. Regardless of the setting of this check box, $10,000 rounding is used to determine the limits for years 1995 through 2001 and no rounding is applied to determine limits for years before 1995.

If you check this box and the benefit determination date is on or before 1/1/2001, the 2001 Tax Act provisions will not be applied, because the earliest possible effective date of EGTRRA is 1/2/2001. (In particular, the commencement age limit reduction will apply for ages younger than social security retirement age and the compensation limit will be rounded in $10,000 increments.) Note that, ProAdmin’s application of the 2001 Tax Act provisions extends to future plan years beginning after 12/31/2010, when, based upon the law in effect prior to the Pension Protection Act of 2006 (PPA), EGTRRA’s sunset provision was set to expire.

Besides the ability to override limits, the U.S. Maximums tab provides access to the 415(b) Maximum Benefit Limit dialog box (via the U.S. Maximum Benefits button), in which you may adjust the assumptions used to calculate section 415(b) maximum benefit limits, for example, “turning off” the three-year average salary limit or selecting the mortality and/or interest rate basis for an early commencement reduction in the limit. For details, see the separate discussion of the parameters of the 415(b) Maximum Benefit Limit dialog box.

U.S. Social Security

The U.S. Social Security tab allows you to override ProAdmin’s historical regulatory data values and/or add them. Enter each value, by the Year to which it applies, in the Social Security Wage Base column, the Social Security CPI column and the Social Security National Average Wage column. Note the one-year and two-year lags, respectively, in historical regulatory data for the CPI and national average wage. Thus, for example, if your benefit determination date is 1/1/2007 and the last year of ProAdmin’s historical regulatory data is 2006, then, in order to run a Final Calculation, you must enter an assumed social security wage base value for 2007, an assumed CPI increase rate for 2006 and an assumed national average wage for 2005. (As noted above, an override entered here for Social Security Wage Base will not apply to a custom regulatory tables of the Wage base Type.)

Canada

For guidance, see the relevant Income Tax Act (ITA) regulations.

The Canada tab allows you to override ProAdmin’s historical regulatory data values and/or add them. Enter each value, by the Year to which it applies, in the ITA Maximum Pension column and the YMPE column.

Besides the ability to override limits, the Canadian Maximum Benefits tab provides access to the Canadian ITA Maximum Pension dialog box (via the Canadian Maximum Benefits button), in which you may define benefit accrual service (including pre-reform and post-reform service), service for determining the early retirement reduction factors, and elect to apply the public safety occupation early retirement reductions to the maximum pension. For details about both ProAdmin’s methodology for computing the maximum pension amount and parameter settings for pensionable service and early retirement reductions, see the separate discussion of the parameters of the Canadian ITA Maximum Pension dialog box.

U.K

The U.K. tab allows you to override ProAdmin’s historical regulatory data values and/or add them. Enter each value, by the Year to which it applies, in the Lower Earnings Limit (LEL) column.