Methodology in Calculating Age

[Fred Payne]

As I review cross-tests perfromed by different TPAs, there are two ways in which a participant's age is being calculated. One that I refer to as the Attained Age method is the age of that person on his or her birthday in the 12 months preceding the Plan's year end. The other method is one that I refer to as Closest Age: what is the participant's age as of the birthday that falls in the 6-month periods before and after the Plan's year end. Given the Closest Age method, some participant's have an age one year older than under the Attained Age method.

I see nothing in the Plan docs that speak to the method to use. In the ERISA Outline Book, Tripodi seems to indicate it's a matter of preference.

I've performed calcs in which a Plan can pass under one method and fail under the other, all other factors being equal.

Can I use whichever method works the best? If so, could I change it from year to year if a demographic shift would favor one over the other?

[Guest sdolce]

This question came up at the 99 ASPA conference. An attendee who identified himself as the IRS actuary in Cincinnati-I don't recall his name-said from the floor that age last should be used,but that the difference due to age nearest was not significant and that he had instructed his staff not to make an issue of it when reviewing plan documents.But it should be specified in the plan.