Maximum permitted disparity Clause Samples
The "Maximum permitted disparity" clause sets a limit on the difference between the benefits provided to highly compensated employees and those provided to other employees within a retirement or benefit plan. In practice, this clause ensures that the formula used to calculate contributions or benefits does not disproportionately favor higher-paid employees beyond a certain threshold, often in compliance with tax regulations. Its core function is to maintain fairness and regulatory compliance in benefit distribution, preventing discrimination in favor of key employees and ensuring the plan retains its qualified status.
Maximum permitted disparity. In applying a Flat Offset Benefit formula, the offset percentage for any Participant may not exceed the Maximum Offset Percentage identified under subsection (3)(ii) below. The offset percentage may be further reduced under the Cumulative Disparity Limit under subsection (3)(iv) below.
Maximum permitted disparity. In completing a Flat Excess Benefit formula under Part 4, #13.b.(1) of the Agreement, the excess percentage under Part 4, #13.b.(1)(b) may not exceed the Maximum Disparity Percentage identified under subsection (3)(i) below. The excess percentage may be further reduced under the Cumulative Disparity Limit under subsection (3)(iv) below.
Maximum permitted disparity. In completing a Unit Excess Benefit formula under Part 4, #13.b. of the Agreement, the excess percentage under the formula may not exceed the Maximum Disparity Percentage identified under subsection (3)(i) below. In addition, if the Employer elects a tiered formula under Part 4, #13.b.(3) of the Nonstandardized Agreement, the percentage designated under Part 4, #13.b.(3)(d) and/or Part 4, #13.b.(3)(f), as applicable, may not exceed the sum of the base percentage under Part 4, #13.b.(3)(a) and the excess percentage under Part 4, #13.b.(3)(b).
Maximum permitted disparity. A Participant's allocation, as determined in Section 2.3.1(b), is not restricted by the maximum permitted disparity limitations of Code section 401(l).