415 annuity factor

[JAY21]

Plan provides for monthly retirement benefits and has lump sum option.

Is there any argument for valuing the 415 limit using annual mortality instead of the usual m-1/2m adjustment to the annual annuity factor (times 12) for benefits payable monthly ?

Plan is over funded so client is looking to max out everything. Thanks.

[Blinky the 3-eyed Fish]

That argument had weight before the final 415 regs were issued. Now it doesn't IMO.

[JAY21]

I assume if I amended the plan (1 man plan) to an annual benefit then I wouldn't have any issue using the annual mortality without further adjustment.

[Mike Preston]

That is like saying that if you amend the plan to pay 500% of pay you wouldn't have an issue with paying the full benefit.

Doesn't work that way. The 415 regs put the kabosh on annual factors for benefits accrued after the effective date of the regs. Unless you can get the IRS to agree that annual rates are ok for all benefits, including those earned after the effective date of the regs, of course.