Bottoms Up QNEC

[Jilliandiz]

Are you still allowed to do a bottom's up QNEC, or were there rulings that eliminated this option?

Suppose I want to draft a new plan document allowing for the bottoms up, can I use it or are they not existent anymore?

Thanks for some reason I thought I heard something about this option going away, but I cant remember?

[Archimage]

You can't use them for plan years starting on or after 1-1-2006. The final 401(k) regs have placed restrictions on targeted QNECs.

[fiona1]

I believe you can still use the Bottom-Up QNEC method. The final regulations just put a limit to how much of the QNEC could be tested in the ADP/ACP test.

The Bottom-Up QNEC is usually made to pass the ADP/ACP test - so it's really not worth making if all of it can't be tested. But the final regulations did not "outlaw" them.

[Archimage]

I guess my post was misleading. I meant to say you won't be able to use them the way you currently do. You can still use them for 2005 plan years.

[Jilliandiz]

So since I would be using it for the 2005 plan year, I wouldn't be limited to the Final Regs and I can use the old bottoms up rules? right?

[Archimage]

That's right.