Have a handful of 412i plans that now are "converting" to traditional DB plans but keeping some of the insurance policies (policies become part of the assets; envelope funding used).

In my way of thinking the benefit formula is unchanged so that there should not be any 411(d)(6) issues with the accrued benefit since it would be as defined under the plan document which hasn't changed. Howver, my opposing thought is when it was a 412i the accrued benefit was equal to the contract value. Does this contract value have to be preserved at a minimum for each participant in the 412i plan ? Kind of a de minimus benefit until new accruals (if any) surpass it ?

Thoughts ? Thanks.

I'm not a DB person, so I'm jumping far into the realm of speculation here for purposes of discussion. The DB'ers can correct all that's wrong with what I'm speculating!

I don't think you can ever cut back the accrued benefit. I'm under the impression, however, that many 412(i) plans have assets that exceed the 415 lump-sum limit. So when you convert, if this is the case, perhaps you amend the formula under the traditional plan to zero, until such time as the new benefit "catches up" with the assets accrued under the 412(i)?