Top 25 Language in DB Plans

[Guest PGH.ERISA]

I have run across a couple of qualified defined benefit plans for non-union employoees that were drafted by another attorney and that do not include the "top 25" pre-termination benfits limitation language that I thought was supposed to be included under the 401(a)(4) regulations. Is anyone aware of any reason why the top 25 language would not need to appear in a non-union DB plan? I have to say that the IRS reviewers who reviewed these documents did not challenge these absences in prior detrmination letter filings, but that could have been their oversight.

[Andy the Actuary]

If you look at the 401(a)(4) reg, you will find that it can be excluded if not deemed necessary by the Commissioner (i.e., IRS) to prevent discrimination. Some attornies believe if you get a D-Letter, that suffices, and will omit such provision; others, point out in the cover letter to their D-Letter filing why it has been omitted.