Impute Permitted Disparity

[David]

In testing a DB/DC combination my understanding is that imputing permitted disparity can be included in the DB EBAR or the DC EBAR, but not in both, is that correct?

[K2retire]

That is correct.

[Mike Preston]

Is it? I know you can't impute more permitted disparity than 100% of the allowable disparity, but if your imputation methodology splits it up between the two, does that work? I just don't have time to look it up right now, otherwise I would be answering my own question!

[K2retire]

It is possible to split it, although too technical for my limited brain capcacity. But you can't use the full disparity more than once in total.

[David]

That's a good point about splitting it, and I don't know the answer off the top of my head, but it sounds right to me, however, in my case my software vendor is using full disparity in both EBARS so it seems that we agree that is not correct.

[AndyH]

Mike is right. This is not black and white. The general rule is that the two must be added together first, then imputation is done. There are many scenarios that are problematic with this rule but this is the general rule.

I have the cite somewhere but I'm not sure where at the moment.

p.s. Well, I stated what I was taught and convinced of recently.

But look at 1.410(b)-5(d)(6)(i) which seems to leave the door open to separate computations if the testing option (sum of separate percentages) of 5(e)(2) is used.

So I think it depends on exactly how the testing is being done, i.e. which if any testing options are being utilized, whether the plans have the same years (in the case of the ABT) and whether the same testing comp is used for each plan.