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415 Dollar Limit - Late - Proration for Partial Years(/ages)?

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I've got a plan with a participant over the dollar limit late in life - this participant wants a lump sum benefit. 

i don't generally deal with anything other than compensation limit issues, but advanced age (late retirement increase) and generous plan features (subsidized lump sum) are the culprit here - the basic plan is not intended to be generous enough to create limit issues. 

My question is, if the participant in question is something like 69 and 6 months, is there any guidance on what is acceptable for non-integer ages in terms of calculating the increased (post-65) dollar limit. 

E.g., if the age 69 calculated limit is $3.2MM and the age 70 calculated limit is $3.4MM (for a lump sum payment form):

1) Is interpolation appropriate/allowed/required?

2) if so, is anything reasonable OK (pro rata in this case vs. a direct calculation at actual age yields a tiny difference. let's say for the sake of discussion that one would be 3.3MM and the other might be $3,301,000)

Sensitivity is heightened since the payment form is a lump sum and the participant's separation of employment is far from amicable.

(the plan document only has boilerplate language, so method isn't specified, and there is no precedent set administratively because this is the first participant in a very large plan who has ever tripped the dollar limit).  

No pre-termination issues with lump sum size, the plan is far too large for that.

 

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By that, do you mean because the participant's lump sum value can drop during the year if the limit (life annuity dollar limit at ages past 65) is based only on the integer age attained?

The plan in this case uses rounded age (integer age nearest) for determination of the lump sum value. 

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In case I didn't mention it, the participant's life annuity benefit is below the dollar limit itself comfortably. It's the generosity of the plan's subsidized lump sum that is causing the problem, combined with an age 62 normal retirement. 

In re-reading the reg section cited above, I see that it's clear that if the participant's annuity benefit had been at the limit at age 62, there would have been a violation of suspension of benefit rules if the participant hadn't been notified of benefit availability, solely due to the limit remaining static between 62 and 65. 

In this case, the underlying life annuity benefit has been increasing steadily, but has never reached the 415 dollar limit as a single life annuity (and doesn't now). 

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In my haste, I missed some examples in the 415 regulations that describe the early retirement adjustment for fractional ages. 

I would assume that I'm overthinking the question above and fractional determination is appropriate if the plan does it (as in, the late retirement increase increments each month, so the calculation of the limit increase should be done to match). 

In the case of my plan, the lump sum factor is based on rounded age, so I would assume that the conversion of the life annuity amount (which increases on a monthly basis) should be done using regulatory factors (since they are less generous than the plan) on a rounded age basis. Or, in short:

* monthly age for the late adjustment to the dollar limit on a straight life annuity basis

* convert the dollar limit to a lump sum form of payment at the plan or regulatory factor basis (whichever yields a lower result) using nearest age as the plan does

 

I don't work on small plans. I'd imagine that the dearth of responses here may have something to do with most of these calculations being done with software packages?

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I would use monthly attained age to convert dollar limit to a lump sum limit. I don't think the administrative practice of the plan should impact the 415 calculations

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