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post-NRA accruals in 401(a)(4) testing


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Let's see how clearly I can detail the situation:

Two owners are the only participants in a DB plan.  They're each about 70.  The DB plan NRA is 65+5 yop.  Formula is 10% per year, and they each earn about 120,000 per year on their W-2s.

The two owners and two staff people are in a DC plan (meant to provide the staff their test-passing requirements, mostly).  That plan has an NRA of straight age 65.  The two participants are 75 and 57.  So this isn't easy to pass to begin with.

2020 was year six for the plan, effective 1-1-2015.  So the owners are only now past their NRA.

A.  The owners' accrual has increased from 50% (five years times 10%) now to 60% of high-3.  This  new benefit is larger than the actuarial increase of the 50% benefit as of NRA last year.

B.  The regulations say you can ignore actuarial increases in the 401(a)(4) testing only if the employees have a uniform normal retirement age.

Am I stuck not having a uniform NRA between the plans?  Could it retroactively be amended lower from 65+5 to 65?  Does the fact that the DB plan's participants are past the need to even mention the 5 yop in the NRA definition carry any impact?  The staff people are excluded from the DB plan by job category, although I suspect that doesn't help the argument that the NRA basically is just 65 in the DB plan at this point.

Obviously it's a lot easier to pass the testing if their DB accrual rate isn't the full 10% but perhaps just (60 minus the adjusted value of the 50 from the year before).

Thanks....

-bri

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1. Since your accruals are larger than the actuarial increase of previous benefits, uniform or non uniform NRA has no difference.

2. I think when regulations say you can ignore actuarial increases, it is for DB only. So 65+5 is the uniform NRA.

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