DB Plan Loan

[ombskid]

In calculating the present value of accrued benefit of a participant for loan limit purposes, would you use plan rates? Lump sum distribution 417e rates?

[Andy the Actuary]

What does Plan stipulate?

[ombskid]

What does Plan stipulate?

Plan only says present value of accrued benefit

[My 2 cents]

Loans under defined benefit plans are an abomination and should not be permitted.

But if the plan permits it, I guess the question would come down to whether you use the plan's actuarial equivalence basis or the 417(e) basis to calculate the value of the accrued benefit.

[Andy the Actuary]

How does plan define "present value?"

[SoCalActuary]

Loans under defined benefit plans are an abomination and should not be permitted.

But if the plan permits it, I guess the question would come down to whether you use the plan's actuarial equivalence basis or the 417(e) basis to calculate the value of the accrued benefit.

It is good to see your empathy to those small business owners who only have a DB plan.

[ombskid]

How does plan define "present value?"

There it is - in the definitions. This particular plan specifies the assumptions chosen in the adoption agreement for computing the top heavy ratio

Thanks