'New' interest rates

[FAPInJax]

Now that the range has been reduced for to 90-100% for current liability calculations, is there any use of the 105% (the old high RPA rate)??

It seems like they left it alone and it still is used in the quarterly penalties but would like other opinions.

Thanks in advance.

[Blinky the 3-eyed Fish]

Please clarify what you mean in the second sentence.

[Guest Doug Goelz]

If an employer so elects, it may determine the 404 maximum deductible contribution to a plan by using the "old" 90-105% range of the weighted 4-year average 30-year Treasury rate.

I'm not sure what you mean by your second comment though.

[Chester]

If an employer elects to use the old rates (90%-105% of 30 year Treasury bond rates) can you use any rate within that range? In other words, if you are using the maximum rate of 100% of the corporate bond rate for minimum funding purposes(6.5% for 1/1/04 valuations), can you use 90% of the old 30 year Treasury rates for 404 purposes (4.72%)?

[david rigby]

Maybe, but no guidance yet.

[Chester]

To phrase the question differently, what were people doing under the 30 year Treasury rate range before 2004? Was any rate in the range being used for 404 deduction purposes? It is my understanding that you could use any rate in the range, but I was wondering if others concur.

[david rigby]

It was my understanding that the rate chosen was used for 412 and 404 purposes.

[FAPInJax]

Sorry for taking so long to clarify.

Does the 105% rate apply for anything other than the option of determining the 404 contribution??

Quarterly contributions, etc.

The old law had a range for RPA liability calculations and another calculation using 105% (affectionately called the RPA high interest rate). The basic question was does the RPA high interest rate exist for anything and the initial comments referred to a 404 calculation option. Anything else??