415 years of participation

[tymesup]

Doctor N is getting a Hypothetical Employer Contribution from cash balance Plan S. Does he get credit for a year of participation for 415(b) purposes?

If not, is there some minimum that would start the clock?

Thanks for any help.

[Mike Preston]

I'm not sure that the receipt of the hypothetical allocation is the trigger for determining whether or not a year of participation for 415(b) has been credited. Isn't this a required definition of the plan document? Usually it is based on hours of service (1000 in most plans, I think). But, if it is based on receipt of a hypothetical allocation then that would be ok, if the IRS approved the language.

[SoCalActuary]

The new 415 regs have attempted to tie benefit accrual to years of participation. So you would get your year of participation by earning a benefit accrual (cash balance allocation for service).

You might still get a year of participation if you don't get an allocation, but generally this is tied to some benefit limit in the plan or other 415 limit issue.