akollman06

Thank you Andy. I do recall Michael making the general comment at ACOPA, but couldn't remember if it applied specifically to this issue.

Thank you very much Larry. I appreciate your advice and will definitely heed it. All the ASPPA/ACOPA materials we have on this point to calculating 401(a)(26) on an annual basis, so the fact they are trying to mandate this "accrued-to-date" approach seems contrary to general practice.

Yes, it's a cash balance plan.

Thank you for your response. That is certainly one of the issues we have with her calculation. The other we have is that she is mandating the use of an accrued to date testing approach, when we believe an annual approach is also acceptable to use.

We are the actuaries on a plan the IRS is reviewing to see if the plan meet's 401(a)(26) meaningful benefits. The IRS actuary is taking the position that meaningful benefits are determined by taking the end of year total accrued benefit, dividing it by years of credited service and then dividing by testing compensation. The actuary then compared this result to see if it meets the "0.5% meaningful test". Using the accrued benefit seems contrary to our understanding of 401(a)(26). All information we have on this points to using just the annual credit (as an annuity) and dividing by testing pay. Does anyone have any thoughts on this? Also, has anyone else seen this interpretation by the IRS? Thank you.