AndyH

I could very well be wrong (I have not finished this and it is only from memory) but I thought that the 2007 FSA rate was applicable. Unless SOCAL is sure, you should look this up - it is in the proposed jungle of regs.

I don't think there is agreement at all that a 4/09 designation satisfies 2008 quarterlies without interest penalty, for exactly the reason you cite - the proposed regs, as well as verbal statements in various forums. It is an argument, maybe it makes sense, but it is not the conservative view.

Yes, you credit the pv of the benefit increase using testing assumptions. As an option, instead of individual pv's you can use the NHCE average for all NHCEs.

Another fishy thing to do might be to make NRA 65 for future participants. You could also consider making the current age ERA for the newbees. You'd have to test it as a BRF (at least without the ERA change) but your xtest would use age 65 because NRA would not be uniform. If of course that is what you want to accomplish.

I have read and seen radically different interpretations of "to the extent funded" within that context. A conservative interpretation would be that the affected parties are vested unless the plan is terminating now in a distress termination, for example. The view that you expressed would be the opposite view. I'm not aware that either are right or wrong, but one is safer than the other absent guidance. I'd like to hear opinions.

That was the topic of a gray book Q&A, that, as Bird said, in-service was the target and they don't really care about ERD so that is how you handle contractual benefits, just call them ERD not NRD. Make NRD compliant and irrelevant.

Anybody with a benefit is of course a participant, at a minimum.

Will you evolve like Chaz?

I propose that you get some legs and climb to dry land.

At a conference this week, JH said there would be hybrid plan regulations this summer or fall and this would be part of those. He seemed to hint that the line will fall at or below 5% but that is merely my impression of what he was hinting at, nothing more. He also said that if a plan currently has an impermissable rate that it could move to a permissisable rate without fear of causing a cutback, but that if a current rate meets the final standards a direct change would not be allowed without some sort of transition. I think he said the regs would still be proposed, so it is not clear to me if the change would need to be made before the issuance of the upcoming proposed regs or the eventual final regs. Not much help I know but some news.

Thanks gentlemen.

May I chime in? This is helpful. We have been asked to comment on a DB/DC combo that has an offset formula equal to a specified dollar annual accrual for a few key people. For others, the DB benefit is defined as the act equiv of the profit sharing account balance offset by the act equiv of the profit sharing account balance. There are maybe 5 people with benefits and the other 50 or so have the "offset formula". We cite a 401(a)(26) issue (among many others). Prior "pension consultant" who does employ an EA (not sure who exactly made this comment) says these participants are benefitting for 401(a)(26) purposes, but their benefit happens to be fully offset. It would sure be helpful to have some bright line for "meaningful" benefits. Is there one? Is this thread saying this is possibly defendable? Other aspects of this actuary's work are clearly inviting an IRS fight (e.g. 3% interest, 9 year setback for 2007 valuation), so perhaps this is the deal here.

For 2008 or 2009? I don't think you have automatic approval or an approval process after 2008.

WRERA I believe made the 415 table be the 417(e) table.

Amazing.

Mr. Spock: These esteemed commenters have apparently never encountered the "no win" scenario. As you know, not everyone believes in that. While their comments are wise, accurate and quite logical, all of this is not prohibited. One could theoretically allow an elective rollover of db funds into a dc plan upon the attainment of NRA and some would say that an election to benefit in only one plan or another might also be allowable (I'm not certain how but I have seen it done), so some elements are theoretically possible. One problem is that you cannot condition the receipt of anything on an election to defer into a K plan. In the end, I'd tell the suggester to put his face back in the jar by the door because the scheme considering the limitations is illogical. LL and P

What was signed in 1999, and when did it say the premiums for 1999 were due?

And even if the allocation were discretionary, some would argue that once again only comp through the amendment date must be treated in the original manner. One thing about the fixed contribution - consider whether a 204(h) notice might be needed if you change it.

Being in a group does not require equal allocations. You could, for instance provide integrated allocations within a group, or even age based. The document just needs to define the group and then define how allocations are allocated within such group. There is no requirement that allocations be pro-rata, depending of course on the document. And certainly a plan can provide for overriding minimums or maximums. The key is that the allocations must be definitely determinable based on the terms of the document. The whole "group" concept is based on the concept that whatever you could do in multiple plans should be doable within one combined plan with multiple groups.

Absolutely. If there is more to your question then you might try and restate; I could not follow much of it. Live long and prosper. Be wary of "the others".

No, if the plan was frozen "correctly". Obviously this depends on the working of the freeze. It need not, put it that way.

Frank, you might want to check the document. I think the 415 language may state that the reduction is applied from 62 using plan equivalence or statutory, whichever is greater, and your plan language may lead directly to the 7%, by accident or not.

I think so.

If there were an easy to use, stand alone proposal program for DB/PS plans out there I would be a customer. Maybe someone out there knows of one. To me it needs to look at a(4) testing, 401(a)(26), gateway, 415, top heavy, minimum funding with segment rates, treasury to bond rate transition, average benefits testing with dc components, 404 etc. I developed my own but would prefer to use a vendor's because the calculations are getting more and more complex.

This is more involved than you seem to think. You need to project the allocation forward to testing age using the interest crediting rate under the plan, convert that to a benefit using the actuarial equivalence factors specified in the plan document. These are plan specific. Then for rate group testing you also need to compute the most valuable accrual rate which is normally the QJSA benefit under the plan, then do a couple of conversions to compute the most valuable accrual rate using the testing assumptions. You need to be fluent in these calcs to understand the MVAR part. This is not as simple as finding a table.