457(b) to mirror qualified Defined Benefit Plan

[Guest austin]

A not for profit client with a defined benefit plan wants to give two HCE participants with compensation in excess of the comp limits additional benefits under a non-qualified arrangement.

The Reg sec 1.457-2(b)(3)indicates that the limit for a nonqualified defined benefit plan is the present value of the increase in the participant's accrued benefit during the year. This plan's formula is A simple until accrual of X% of average compensation for the first 35 years of service. One participant has already achieved 35 years of service and has accrued the maximum benefit under the qualified plan. If this client sets up a non-qualifed plan, is the accrual for the first year the full difference between this maximum benefit and the benefit calculated without regard to the comp limits. I guess my question is: In year one does this participant accrue the full difference in benefits with subsequent year accruals based solely upon increases in the comp limit or, must the plan accrue the difference in benefits over the participant's remaining service (e.g. the participant has 8 years to NRD ). Or, can the client decide up front which methodology to use. Concerns are is service with employer prior to effective date of the 457 plan allowed to be used, and is there a maximum benefit that can be funded in this plan.