Lear Eye Clinic, Ltd., et al. - Page 8

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            that had arisen, which prevented many of those plans from                                     
            achieving their full potential as a source for retirement income.                             
            Citrus Valley Estates, Inc. v. Commissioner, 99 T.C. at 399.                                  
                  In conjunction with its effort to expand the number of                                  
            employees participating in employer-financed plans, Congress also                             
            placed limits on the amounts of pension contributions and                                     
            benefits available under those plans.                                                         
                  [I]t is not in the public interest to make the                                          
                  substantial favored tax treatment associated with                                       
                  qualified retirement plans available without any                                        
                  specific limitation as to the size of the contributions                                 
                  or the amount of benefits that can be provided under                                    
                  such plans.  The fact that present law does not provide                                 
                  such specific limitations has made it possible for                                      
                  extremely large contributions and benefits to be made                                   
                  under qualified plans for some highly paid individuals.                                 
                  While there is, of course, no objection to large                                        
                  retirement benefits in themselves, your committee                                       
                  believes it is not appropriate to finance extremely                                     
                  large benefits in part at public expense through the                                    
                  use of the special tax treatment. * * *                                                 
                  *        *        *        *        *        *        *                                 
                        Moreover, to prevent abuse, the full [section                                     
                  415(b)(1)] maximum benefit may be paid only to                                          
                  individuals who have 10 years or more service.  Where                                   
                  an individual has served for less than 10 years, the                                    
                  maximum permissible benefit is reduced proportionately.                                 
                  [H. Rept. 93-807, at 35-36 (1974), 1974-3 C.B. (Supp.)                                  
                  236, 270-271.]                                                                          
                  Section 415(a) precludes qualified plans from providing for                             
            payment of annual benefits in excess of an amount determined                                  
            under subsection (b).  Section 415(b)(1) establishes an annual                                
            benefit limitation as the lesser of a dollar amount ($75,000, as                              
            adjusted under section 415(b)(2), for the years at issue) or 100                              





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