Retroactive Amendments

[Guest Mauiorbust]

We have a 401(k) sponsor who added a cash balance plan for the 2009 py. The actuary wants us to amend the plan effective 1/1/09 to change the non-elective formula from discretionary age weighted to individual groups, add j&s, lower nra, take out the last day accrual requirement and allow for the top heavy minimum to be made in the 401(k). I looked in the ERISA Outline book and it appears there isn't a definitive answer regarding whether it's permissible or not. Cites from Izzarelli v. Rexene Products (5th Cir. 1994) and TAM97350 regarding the change in allocation formula differ in opinion. Should I question this or just follow the actuaries request?

[rcline46]

I cannot believe an enrolled actuay would make such a request, much of it nonsense. J&S? That can be added any time. SOme think its good, others do not, and that should be the client's decision.

Much of the other stuff is, in my opinion, not doable, the year is over. He is just trying to justify his Cash Balance design because guess what - its not working! He should have requested the changes prior to the year end.

Even if for the current year, these changes need to be discussed with the client with the implications of each of the changes on the plan and contributions before changing the plan willy nilly.

And did I say changing the formula after the year end is IMHO a bad idea?