Change in NRA

[buckaroo]

I have a plan that currently has a NRA of 54 1/2. At this time they may wish to amend it. Forgetting for the moment that this NRA may be unreasonable and Notice 2007-69, let's say that the client amends it to NRA of 62. My recollection is that the NRA is a protected benefit. Is this correct?

Additionally, the plan is currently a new comparability plan. I was using age 54 1/2 to process the EBARs. With the NRA change, what do I use to calc the EBARs. I would guess age 65. The reasoning for this is because age 54 1/2 and age 62 are not uniform as the NRA is a protected benefit. Therefore, when the NRA is not uniform, Age 65 is to be used.

Am I on the right track or way off track. Any comments and cites are greatly appreciated.

[Blinky the 3-eyed Fish]

This is a new-comparibility target benefit or money purchase plan? I doubt it. Reasonableness of NRA only applies to pension plans.

[buckaroo]

Thanks for the info. I will keep in mind the comment about resonableness.

That being said, I think that my question should be, if a plan changes the NRA, what is used for a new comp PSP?

[Blinky the 3-eyed Fish]

The NRA is protected for benefits accrued, not future contributions. So if you are testing under the annual method, I can't see why you wouldn't treat the NRA applicable to the contribution for that year. Keep it simple and amend the NRA effective 1/1/xxxx.

Now if you were testing using something other than the annual method, perhaps age 65 would be the appropriate testing age, although I would have to think about that a little more. I reserve the right to give that no further thought because I doubt you are not using the annual method.

[AndyH]

Another fishy thing to do might be to make NRA 65 for future participants. You could also consider making the current age ERA for the newbees. You'd have to test it as a BRF (at least without the ERA change) but your xtest would use age 65 because NRA would not be uniform. If of course that is what you want to accomplish.