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A client has a DB plan, started in 1998. The plan was subject to a Hard Freeze in 2016, and a new pension plan was established.  The frozen plan is DB001, the new plan DB002.   Both plans are overfunded with significant excess assets. DB001 accrued benefit is $12,000/mo, DB002 $1,500/mo.

Both plans terminated in 2018, participant is now 70. The aggregate 415 limit is $14,166.67/month ( C limit) and the aggregate 415 LS (both plans) is $1,799,000. Note the accrued benefits in both plans is $13,500 < 415 limit. The question is how do I apply the 415 limit to each plan? The plan doc says to apply the 415 limit first to DB001. The problem comes from the MPV which impacts the 415 limit even though the total accrued benefits as annuities do not exceed 415. The PVAB ( MPV) is $1,700,00 in DB001 and $225,000 in DB002.

It seems that DB001 pays the full PVAB  and  DB002 get the knife. This doesn't seem right. Is there another approach?

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The limit is a cap, so whoever goes last is cut down to size. 

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