The qualified benefit preservation arrangement is established and placed under the management of the board. The purpose of the qualified benefit preservation arrangement is solely to provide a portion of the benefit that would otherwise have been payable by the system except for the limitations under section 415(b) of the Internal Revenue Code, as determined in § 3-12C-1805. The qualified benefit preservation arrangement is intended to constitute a qualified governmental excess benefit arrangement under section 415(m) of the Internal Revenue Code and shall be interpreted and construed consistently with that intent. The qualified benefit preservation arrangement is a portion of the system solely to the extent required under, and within the meaning of, code section 415(m)(3) and § 3-12C-1805.

The qualified benefit preservation arrangement is an exempt governmental deferred compensation plan described in code section 3121(v)(3). Code sections 83, 402(b), 457(a) and 457(f)(1) do not apply to the qualified benefit preservation arrangement. With respect to code section 457(a), the maximum amount that may be deferred under the qualified benefit preservation arrangement on behalf of any participant for the taxable year may exceed both the amount in code section 457(b)(2), as adjusted for cost of living increases, and the percent of the participant’s includible compensation referred to in that code section. The system may not hold any assets or income under the qualified benefit preservation arrangement in trust for the exclusive benefit of participants.

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Source: SL 2020, ch 14, § 3.