415 Final Regulations and Conversion to Multiemployer Plan

[Guest dsw]

The final 415 regulations provide that a multiemployer plan can no longer disaggregate a benefit attributable to contributions from 2 contributing employers for purposes of applying the 415 benefit limit. However, the ability to disaggregate for benefits accrued through 12/31/07 is grandfathered if the plan was amended to allow disaggregation prior to the 4/5/07 effective date of the final regs.

Does anyone have any sense of how this rule would apply to a former single employer plan that converted to multiemployer status under the PPA procedures effective 1/1/06? Specifically, if a participant's benefit from the converted plan is attributable to contributions from 2 employers, but the contributions of one employer were all for years prior to 1/1/06 when the plan was a single, would the plan still be able to disaggregate for the entire benefit accrued through 12/31/07? Or would disaggregation only apply to the portion of the benefit accrued for 2006 and 2007? If the latter, am I correct in assuming that the plan's ability to disaggregate for 2006 and 2007 would effectively be worthless, since the plan only received contributions on the participant's behalf from one employer during those years?

I have not found any IRS guidance on this specific issue, and I fear that none exists, so any insight that anyone might have would be greatly appreciated.