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Guest Keith N

Family Aggregation retro repeal

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Guest Keith N

Does anyone know of any reason we I can't repeal the family aggregation rules retroactively? I'm mostly concerned about the comp limit. Can I amend a plan to allow an increase in benefits for the current year (assuming it passes 410(B)) to pick up the lost benefits when the familiy aggregation rules limited the pay?

Maybe I'm behind the curve on this one, but I don't see any reason why I can't do it? Any comments?

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If the plan year hasn't ended, I think you're OK -- heck, I think Code section 412©(8) even allows pension plans to be amended to increase benefits as late as 2-1/2 months after the end of the plan year for which the increase becomes effective.

One angle, though: would repeal of the family aggregation rules mean that any other employees would receive a lesser benefit than they would have received had the family aggregation rule applied? In a profit-sharing plan that might be an issue, but I wouldn't think it would affect a pension plan.

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