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Limit Funding Target by 415 LS limit?
Guest posted a topic in Defined Benefit Plans, Including Cash Balance
A dummy DB plan with the following assumptions: NRA 62 100% participants receive lump sum distributions (aka fund to lump sum) Let's assume this is a 1-man plan who is age 60. His PVABs are as follows: AEQ LS: $350K 417(e) LS: $420K 415 limited LS: $380K The current funding target, calculated by our 3rd party software is about $420k. My question is, should the funding target be limited to the 415 max? It seems odd to me that if this person were to put in $420k, and then terminate the plan, his lump sum would be limited to $380k. I've looked in quite a few places and cannot find anywhere that the funding target should be limited by the 415 max lump sum amount. Any help, citings, etc. would be greatly appreciated on this one. Thanks.