Cash Balance Plan amendments

[AndyH]

Did anybody else read ASPPA ASAP No. 09-44 and come away thinking that cash balance plans needed to be amended by 12/31/2009 if their existing interest credit might not satisfy the eventual final regulations?

IRS Announcement 2009-82, issued a couple/few weeks ago seemed to say that you need not amend the interest credit until after final regulations on hybrid plans are issued, provided that the plan is amended before 1/1/2011 (if it needs to be amended at all). I took that as basically a 1 year delay in the required amendment and change.

Then ASPPA ASAP 09-44 comes out and references and discusses 2009-82 but I cannot determine it's conclusion if other than that plans must be amended by 12/31/2009 if the interest credit is inconsistent with the final regulation.

Can anybody clarify the rules and amendment requirements if, for example, a CB plan currently credits a flat 5.50% and would prefer to retain this until forced to change? Assuming that 5.50% is no acceptable under final regulations, does such a plan need to be amended by 12/31/2009, or 12/31/2010?

[SoCalActuary]

Assuming that 5.50% is no acceptable under final regulations, does such a plan need to be amended by 12/31/2009, or 12/31/2010?

I would say 12/31/2010, since we don't have the final regs yet.

But the 5.5% level is still under debate. If you can argue that 5.5% is lower than the 3rd segment rate for the vast majority of measured intervals, the IRS might listen to you and grant a determination. We must wait and see what ideas come from the minds of our glorious leaders at the government.....

[AndyH]

Thanks.

The ASPPA ASAP I referenced was very unclear IMHO but it caused concern that the due date is 12/31/2009, which seems to me to directly conflict with announcement 2009-82.