Floor Offset Plans

[flosfur]

If the DC plan in a Floor Offset arrangement is a Profit Sharing plan then for DB funding cost computation purposes what contribution level is (can be/should be) assumed for projecting the PSP balances at NRA?

What if no contribution has been made to the PSP for last n years or contributions have been up & down and intermittent?

Can one assume zero future PSP contributions to maximize DB cost (assuming the combined 25% deduction limit does not become an issue).

[FAPInJax]

Generally, the assumption made for future contributions is whatever the most recent contribution was. However, there is nothing to say that an average of the last x years or no future contributions is an unreasonable assumption. Now, you may have to disclose a change of assumptions / method but I am unsure.

[Mike Preston]

I find it hard to believe that the IRS will accept a zero projection in the year when the PS contribution was not zero. The projection must be reasonable. That means whatever the IRS wants it to mean when the plan is audited.