Accrued-to Date Testing For Deferred Retirees and Wearaway

[Guest merlin]

I have a plan that I need to test on the ATD method. I have 1 HCE who is a deferred retiree who has been getting actuarial increases from his NRD. I also have 1 HCE and 1 NHCE who have accrued benefits that are wearing away under a prior formula. Their annual accrual is -0-, but I have a question on their ATD benefit. The valuation system (Relius) is taking their current benefit and dividing by current testing service. This seems to overstate the benefit for the deferred retiree, because it now is taking into account the actuarial increase that I could ignore under 1.401(a)(4)-3(f); and understate the benefit for the two wearaways, because their benefit is decreasing with increasing service.

I think I can restructur the three -0-s into their own component plan and test on the annual method, and test everyone else on ATD, but I'd like to know the answer to the above.