401(a)(4) Testing of DB/DC Combo

[flosfur]

DB/DC combo plans are being aggregated for 401(a)(4).

The aggregated plans do not pass under the "Annual Method". So the next option is to use the "Accrued-To-Date Method".

Can one use the following approach?

1) Compute the DB plan's Normal & Most Valuable annual accruals (NARs & MVARs) using the "Accrued-To-Date method", and

2) Compute the DC plan's Equivalent annual accruals using the "Annual Method" (to avoid having to collect data required for the "Accrued-To-Date Method").

Then add the DB & DC's annual accruals and compute the accrual rates therefrom.

[tymesup]

1.401(a)(4)-3(d)(1)(iii) defines "Measurement period" as current; current and all prior *; or current and all prior and future years. Since this must be an exclusive "or", I don't think you can mix your methods.

Note that -(d)(2)(i) has a consistency requirement.

I hope that a post time of 2:58 am is due to a different time zone.

* Never noticed the "all prior" language before. I suppose it could have been advantageous to use some of the prior years.

[AndyH]

I don't think you can do it either, as I don't think it meets any of the exceptions to the consistency requirements. I'd have to spend a good deal of time researching it to be certain, but that is my understanding and quick re-read of the regs.