1. All of the following statements regarding the limitations of IRC Section 415 are true EXCEPT (and explain why): a. All covered defined benefit plans maintained by the employer must be aggregated for purposes of applying the limitations of IRC Section 415; similarly all covered defined contribution plans maintained by the employer must be aggregated for purposes of applying those limitations. b. IRC Section 415 imposes a specific definition of compensation in determining the maximum limitation of Section 415. c. The predetermined restriction rules of Section 401(a)(4) are similar to Section 415 rules in that they both limit the amount of distributions that can be paid to any participant. 2. Due to a profitable year, a plan sponsor would like to enhance its qualified defined benefit plan for a select group of participants. The current NRB and AB formula provides 1% x FAE x years of participation/65/life only or J&S. The early retirement reduction factor is 3%. The sponsor would like to enhance the benefit annual accrual rate to 1.5% for a select group of participants only. a. What additional numerical testing is required to be satisfied in order to maintain the plans qualified status. Briefly describe how the tests would be satisfied. b. Assume the change is made in 2006 for a select group of participants and, as a result, the plan fails to satisfy the applicable discrimination tests for 2006. What recourse would the sponsor have in order to avoid disqualification