415 lump sums in 2008

[Gary]

Say a first year plan has a 12/31/08 valuation date. It is my understanding that for funding the 24 month segment rates that can be used are those for applicable month, where the applicable month can be December 2008 or any of the four preceding months. So therefore, it would be acceptable to use August 2008 24 mo. segment rates for funding purposes and even if the form of payment is a lump sum.

Let's assume the plan lump sum basis is the 417e rate and the 2008 app mortality table.

Now let's move on to 415 lump sums.

My understanding of the most recent information on this subject (it may have been since superseded) was that the 415 lump sum basis uses GAR94 still and the greatest interest rate of the following:

1. 5.5%

2. plan rates (let's assume they are the 417e rates)

3. the rate that produces a pv that is 105% of the pv using the 417e rates.

So, prior to 2008 if the 30 year treasury for the applicable month was less than 5.5%, then the required interest rate would of course be 5.5%

For distributions in 2008 (assume calendar year plan year) is the only difference the 417e rate?

So for example if the 417e rate was based on the applicable month of December prior to plan year, than for 2008 would the 30 year treasury for 12/07 be replaced with the 417e rates now in force?

My understanding is that the 417e rates are now based on transitional rates that combine spot segment rates for a given month (in this case December 2007) and the 30 year tresaury rates.

Basically, I am referring to the minimum present value rates now in force (i.e. I don't have access to the specific terminology at this moment).

Is my above interpretation accurate or has there been other revisions to the 415 lump sum calculation that I will need to research?

Thank you.