Under a defined benefit plan,the annual benefit payable to an employee is limited to the smaller of $210,000 (in 2016)or 100% of the employee's average compensation for the highest 3 years of employment.

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This statement is true as per the limits set by the Internal Revenue Service (IRS) for defined benefit plans in the year 2016. The annual benefit payable cannot exceed the smaller of $210,000 or 100% of the employee's average compensation for the highest 3 years of employment.

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