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RPA Amendments - Gaat Legislation 1994


Guest jhengle

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Guest jhengle

Can employer adopt treasury rate and

use 1984 mortality table or use PBGC rate and adopt treasury table and use thru 12/31/99? i.e. Never use both applicable interest rate and applicable mortality table until required.

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As i understand the Q, the sponsor need not adopt the GATT changes for determining the minimum lump sum until the 2000 plan year (or am I off by a year?). Note that this is a change to the minimum specified in IRC sec. 417; the sponsor can always be more generous.

However, if it is a new plan (hallelujah), then I think the GATT minimum should be included in the plan from its effective date.

Since we are dealing with minimums, the interest and mortality basis in your lump sum definition can be anything you want (non-discriminatory) as long as the minimum amount is included.

Note that as age increases, the GATT lump sum gets closer to the old PBGC definition. In fact, in some cases I have seen lately, the GATT amount is higher, usually at about age 64+.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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