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Omnibus Budget Reconciliation Act (OBRA )

Last Updated March 22, 2009

Definition

 

There are several versions of OBRA

  • OBRA 90 increased the employer reversion penalty from 15 to 50%
  • OBRA 93 instituted the compensation cap
  • Section 407(d)(9) of ERISA, as added by section 9345(a)(2) of OBRA '87, provides that, for purposes of section 407, an arrangement which consists of a defined benefit plan and an individual account plan shall be treated as one plan if the benefits of such arrangement are taken into account in determining the benefits payable under such defined benefit plan.

Referring Cite

www.irs.gov  , www.dol.gov  

Additional Helpful Information

 

  • Section 407(d)(3)(C) of ERISA, was added by section 9345(a)(1) of OBRA '87,  and provides that the term "eligible individual account plan" does not include any individual account plan the benefits of which are taken into account in determining the benefits payable to a participant under any defined benefit plan.
  • Section 9345(a)(3) of OBRA '87 provides that sections 407(d)(3)(C) and 407(d)(9) shall apply with respect to arrangements established after December 17, 1987. Thus, sections 407(d)(3)(C) and 407(d)(9) of ERISA do not apply to floor-offset arrangements established on or before December 17, 1987.