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Deduction problems & 412(c)(8)


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I am currently working with a multiemployer plan which has run into some problems being able to deduct the employer contributions. 412©(8) and 11.412©-7 seem to state that I can adopt a retroactive amendment within 2 years after the close of the Plan Year and be able to recognize it for 412 & I assume 404.

Lets assume that I'm working on the 1/1/99 valuation. The 98 Max was 100K and the employer contributions were 200K (both expected and actual for simplicity).

Can we amend the Plan now (12/99), effective 1/1/98, to increase retirees by 5% on 1/1/2000? Assuming it would generate a max of 200K in 98, if we had done it then, are we "ok" for 98 or does the amendment have to increase the actives benefit?

Does anyone know of any real guidence on this?

Would I have to amend the 98 Sch. B as well?

Any comments would be greatly appreciated.

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