conversion from a 412(i) to standard db

[abanky]

How much of a pain in the butt is this? Any guidance issued out there?

[ScottR]

It's not very difficult. Just amend the plan document as needed, and start doing annual vals/Sch. SB's. I'm not aware of any written guidance, but there may be some.

.. Scott

[Blinky the 3-eyed Fish]

I don't think it's quite that simple. After all, you have an accrued benefit equal to the CSV of the policies that is protected (as well as other optional forms) and needs to be tracked. It would seem that the guaranteed interest rate of the policy is too protected, much like an interest rate in a cash balance plan. It wouldn't make sense to have the lump sum be static. The document language should account for this grandfathered benefit. I know of no VS language that will account for this, so you probably are on your own to write it.

The valuation would be fairly simple. Now it's just a traditional DB plan, and probably an overfunded one at that. I believe the new regs mention how life insurance is to be valued, so account for that when it's time for those to take effect.

[abanky]

If the plan has a large life insurance policy... do they continue to pay for that or let it expire?