more on new lump sum rates

[Guest lerieleech]

Please excuse me if this has been answered before. I have a feeling it might have, but I just don't feel like slogging thru all the posts right now.

A calendar year plan specifies that AEQ assumptions are interest based on 30-year Tresury securities, and the mortality table specified in Rev. Rul. 2001-62. No mention of minimum lump sums, no separate AEQ for lump sums and other forms, no incorporating the interest rates or mortality table by reference, and these are the AEQ assumptions for all forms of payment. Stability period is one year, and the November rate is used.

Assuming the plan is not amended by 1/1/08:

1. As of 1/1/08, do we need to calculate the lump sum based on the old mortality table (2001-62) and the Nov. 2007 rate? Or is the 12/31/07 lump sum amount protected? (Clearly we need to provide the minimum LS based on the new rates.)

2. As of 1/1/08, I believe monthly options are based on the Nov. 2007 Treasury rate. Do we continue to use the 2001-62 mortality?

[Guest Steve C]

1. I believe you can base lump sums entirely on the new PPA 417(e) basis - no need to compare against the current AE basis, or to protect 12/31/07 lump sums. That's how I read PPA section 1107 and Rev Rul 2007-67 (so long as amend by the end of the 2009 plan year, and plan operation is consistent with the amendment).

2. I'd continue to use 2001-62 mortality for monthly options, except for pure certain periods (which are subject to 417(e)).

That's my read, but I'd like to see what others have to say.