Granting Hypothetical Service in a DB Plan

[Guest Grumpy456]

What rules govern how a plan grants a participant service in a DB plan?

I know a plan can grant participants past service in some cases and even service with a predecessor employer, but what about grants of fictional service?

For example, assume a plan provides a benefit of $50 a month times years of service. When Jim retires, he has 10 years of service, but the plan sponsor wants Jim to get $1,000 a month from the plan, not $500 a month ($50 times 10). So the plan sponsor just decides, on a whim, to credit Jim with an extra 10 years of service in order to "gross up" his benefit. Is such a technique permissible? If so, is such a technique subject to any special nondiscrimination tests?

[Blinky the 3-eyed Fish]

The benefit would just need to be determinable, so creating an amendment that grants Jim an extra 10 years of service is permissible. Of course it is subject to nondiscrimination, so if Jim is an HCE, you certainly have a grave timing of amendments issue under 1.401(a)(4)-5 and general testing to perform. If he's an NHCE, then no problem.