Asset Valuation Method

[Guest h20]

I have a DB plan that has an asset smoothing method in practice for the valuation assets. This has only been in effect for 3 or 4 years. Can I go back to Fair Value without consequence and how often can you jump between asset valuation methods since they are all categorized as automatically approved?

[david rigby]

This has only been in effect for 3 or 4 years.

It depends on what you mean by this. In general, a method must remain in effect for at least five years before you can go back to automatic approval for a change under Rev. Proc. 2000-40. However, the establishment of a new plan does not start that 5 year clock. If your reference to "in effect" means the plan's existence, then you can change the method.

If you have not read the Revenue Procedure, it is important that you do so before further analysis. Find it here. Also recommended is a Search of this Message Board for additional discussions.

BTW, if you get an "agree" from either Blinky or MGB, then feel comforted.

[Guest h20]

Thanks for the mind boost. I had assumed it was 5 but needed the language. Cannot be changed if it had been changed in the previous 4 years.