Randy Watson Posted July 28, 2009 Posted July 28, 2009 Are annual interest credits based on the account balance on the 1st day of the year or the last day?
SoCalActuary Posted July 28, 2009 Posted July 28, 2009 Are annual interest credits based on the account balance on the 1st day of the year or the last day? The document determines the method. Some plans credit the contribution monthly and the interest monthly. Most smaller plans credit the amount annually. Some plans credit no interest if distribution occurs during the period, while others credit interest until the period ending before the actual distribution. To my knowledge, the IRS has not taken a position that intermediate valuation is required, so it is OK to make annual crediting of interest on the beginning balance. But it has to follow the plan document.
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