Interpretation of 404 deduction limits

[Gary]

A small DBPP has the following:

Minimum funding under aggregate method = 13,000

Erisa FFL = 27,000

OBRA FFL = 176,000

RPA FFL = 46,000

Unfunded RPA CL = 60,000

It seems that the minimum funding is 13,000.

The FFL = 46,000

The deductible limit can be up to 60,000 under 404(a)(1)(D), thus resulting in a potentially large FSA credit balance.

It's a relatively new plan that provided past service credit.

Am I missing something or is this interpretation correct? As I haven't had much need to this point to apply the unfunded RPA CL limit.

Thanks.

[Blinky the 3-eyed Fish]

You are correct. Although, if there was an amendment in the last 2 years that increased benefits for HCE's, then your RPA numbers would be overstated for the UCL deduction.

[Gary]

Agreed!

However, I have taken the position that a newly implemented plan doesn't qualify as an amendment or at least I have seen nothing explicit on that.

Gary the two-eyed person.

[Blinky the 3-eyed Fish]

I have taken that position as well and vaguely recall Jim Holland at the 2004 LA Benefits Conference stating the same. That was almost a year ago though, so take it with a grain of salt.

[himt4]

Just checking to see if it is still the conventional wisdom that a "new plan" is not considered an amended plan and can take the unfunded current liability as a deduction in year 1.