Defined Benefit Plans (including 412i plans)

[Guest Carol the Writer]

One of my clients has a 412(i) plan that he wants to convert to a traditional split-funded defined benefit plan. I had pictured amending the Plan "without wear away" and applying the fractional rule to future accruals.

Datair's footnotes to their volume submitter document says that it is not possible use without wear away with the future fractional rule under any circumstance, not just under the 412(i).

Why? This approach makes all the sense in the world to me. Is it just Datair's documents or has the IRS said something on the matter? Also, what sort of post-amendment accrual would one use, given that the client does not want to front-load his accrual formula?

Any help would be appreciated. I am anxious about this one. Thanks!

[Belgarath]

Don't know if this will help - I spoke with an Enrolled Actuary this morning, and he said that he thought (although not sure without doing some research) that the "without wearaway" requirement for 412(i) plans was due to LRM 23. Maybe this will give you a starting point.