Jump to content

Interest Rate for EBAR Calculation

Recommended Posts

Is the approved interest rate when calculating an EBAR in a Cash Balance Plan still between 7.5% and 8.5%?  I was discussing this with someone and know that used to be the acceptable range, but I wasn't sure if that had been changed or indexed.


Link to post
Share on other sites

Assuming you are doing annual testing on a benefits basis, project the CB pay credit to retirement age using the CB interest crediting rate defined in the plan for the testing year (not a testing interest rate) and divide that result by an annuity factor at retirement based on the plans definition of actuarial equivalence. Divide that by testing compensation to get the CB EBAR. That assumes testing age equals retirement age. 

Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Create New...