More fun with 415 questions

[AndyH]

Looking over some proposed calculations. Fairly basic questions

If someone has an accrued benefit that would exceed the 415 limit at age 70 1/2 but is reduced to the 415 limit receives minimum distributiions, is the maximum benefit at age 71 the age 71 415 dollar limit, or that limit less the pv of minimum distributions? Same question 71 to 72 for example, Doesn't the 415 dollar limit need to relect prior minimums?

Thanks for any help.

[Belgarath]

I'm getting out of my league here, not being of actuarial background or training, but I think I agree. Reading proposed reg. 1.415(b)-2(a), I come away with the same opinion, that you have to reduce for prior distributions. And I don't see any special carve out for minimum distributions.

[AndyH]

Thank you.

If we are right, then what I am looking at (done by an actuary with another firm with 35 years of experience) is wrong.

Any dissenting opinions?

[SoCalActuary]

Yes, I dissent. Don't count the proposed reg's yet. They have serious flaws that need to be fixed before they are ready for real life.

One key question is the determination of the annuity starting date. Did you have a lump sum payment at age 70 as a one-time payment, or did you start an annuity stream of payments? Under the new a9 regs for minimum distribution, you need to start an annuity stream based on the accrued benefits. So what election was made on the method of minimum distributions?

Also, the interpretations on min distributions are not uniform in the industry. If you think the old actuary is wrong, are you prepared to defend your position with thoughtful research and citations for your authority? Will you get paid to do so?

[AndyH]

Obviously I intended to submit a poll as evidence and pass the hat.

[Blinky the 3-eyed Fish]

I agree to not count on the proposed 415 regs until they are hatched. I do think though that any distributions, including minimum distributions, should reduce the dollar limit.

[AndyH]

Thanks. Maybe we're back to the question as to whether a benefit in excess of 415 can be accrued.