Under a defined benefit plan, the annual benefit payable to an employee is limited to the lesser of $225,000 (in 2019)
or 100% of the employee's average compensation for the highest three years of employment.

Question

Quizplus · Accepted Answer

This statement is true. Under a defined benefit plan, there are limitations on the amount of annual benefit that can be paid to an employee. In 2019, this limit is $225,000 or 100% of the average compensation for the highest three years of employment, whichever is less.

Under a Defined Benefit Plan, the Annual Benefit Payable to an Employee