Cost of insured death benefits in a DB plan.

[Guest pension222]

Rev. Rul. 74-307 basically says that an insured death benefit will be incidental if the face value of the policy does not exceed 100x the projected monthly retirement benefit or the premium is less than 50% (or 25% depending on the type of the policy) of the employer contribution credited to a participant's account.

Just what would one base this 50% (or 25%) on in a DB plan? Would it be 50% (or 25%) of the normal cost for the participant and if so, what do you do if you are using an aggregate method?

I do seem to recall that one can subsitute 66% for 50% and 33% for 25% if these percentages are applied to a normal cost calculated under the ILP funding method but cannot find a citation to back this up. Does anyone know where this comes from?

And finally, am I correct in my belief that these limitations apply to the insured death benefit under a 412(i) arrangement as they would to any other DB plan?

[Guest merlin]

I have a response from Jim Holland to a general information request that should answer your first two questions.What is your fax #?

The answer to your third question is that 412(i) plans are subject to the same incidental benefit rules as any other qualified plan.