Market Rate of Interest - Frozen Plan

[Guest Lane]

If a frozen cash balance plan uses an interest crediting rate that is in excess of a "market rate of return" under the final and proposed regs that were just issued, does the frozen plan have to recalculate benefits for all participants using the lower interest rate? If so, for what years would the lower interest rate be applied?

[My 2 cents]

Haven't looked at the regs, but wouldn't the plan have to be changed, prospectively, to use a market rate commencing on the effective date of the change? The benefit would be defined in terms of the equivalent of the balance (which is what it is but which will accrue interest period by period). I presume that there is sufficient permission to reduce account balances to the extent necessary to make the switch retroactive the date as of which the rate must be set to a market rate. Are people who administer cash balance plans locking in a monthly benefit as of date of separation from service or would the monthly benefit float from year to year (up or down) to reflect a floating interest credit rate, or are they just continuing to accrue the floating rate on the undistributed account until benefit commencement date, even if the equivalent monthly benefit would go down?