Max 415 Age 70 DB plan

[Guest Doogie61]

I have a plan that someone wants me to take over. The prior actuary has a monthly pension and accrued benefit at age 70 of $22,431 as of 12/31/08. The compensation was always been at the max allowed ($230,000, $225,000, $200,0000, $210,000 etc). Since the plan uses a 3 yr avg. the monthly pension EXCEEDS the salary 3 yr avg of $18,194 as of 12/31/08.

[JAY21]

I'll take a guess:

1. The $22,431 is the 415 dollar limitation actuarially increased from ag 65 to age 70 (seems about right).

2. The High-3 average "may" have been grandfathered even though higher than the 401(a)(17) comp limit, and higher than the actuarially increased dollar limit, if the terms of the plan as of 4/5/07 (final 415 reg enacted date) allowed for 415 compensation to be higher than the 401(a)(17) limit. See the final 415 regs on what can be grandfathered but they expressly provide that an accrued benefit may be grandfathered even if higher than the 401(a)(17) limited high-3 average IF the plan provisions allowed for this higher 415 comp and plan provisions were in compliance with "then" 415 rules.

I'd check final 415 regs for exact criteria and ensure the grandfathered application has been applied correctly.

[Guest Doogie61]

I'll take a guess:

1. The $22,431 is the 415 dollar limitation actuarially increased from ag 65 to age 70 (seems about right).

2. The High-3 average "may" have been grandfathered even though higher than the 401(a)(17) comp limit, and higher than the actuarially increased dollar limit, if the terms of the plan as of 4/5/07 (final 415 reg enacted date) allowed for 415 compensation to be higher than the 401(a)(17) limit. See the final 415 regs on what can be grandfathered but they expressly provide that an accrued benefit may be grandfathered even if higher than the 401(a)(17) limited high-3 average IF the plan provisions allowed for this higher 415 comp and plan provisions were in compliance with "then" 415 rules.

I'd check final 415 regs for exact criteria and ensure the grandfathered application has been applied correctly.

Thanks JAY21..you rock !

[david rigby]

... IF the plan provisions allowed for this higher 415 comp and plan provisions were in compliance with "then" 415 rules.

This caveat cannot be emphasized too much.