Qualified Excess Benefit Arrangement

IRC Section 415(b) & Qualified Excess Benefit Arrangement (QEBA)

Under federal tax law, a retiree is permitted to receive pension benefits up to a set annual allowable limit determined by the Internal Revenue Code (IRC). The retirement benefits for some highly compensated employees may be subject to the IRC section 415(b) annual pension benefit limit.

Legislation enacted by the 2013 General Assembly established a Qualified Excess Benefit Arrangement (QEBA) fund to pay the part of a retiree’s retirement allowance that exceeds the limit. Recent legislation amended the QEBA law to provide that members hired prior to January 1, 2015, are eligible to receive benefit payments from the QEBA fund. However, the last employer for a member who retires on or after August 1, 2016, will be required to reimburse the QEBA fund for any payments made to that retiree from the QEBA fund. For more information, please refer to the QEBA Fact Sheet, or the  Employer Manuals​.