Testing Age DB/DC combination

[John Feldt ERPA CPC QPA]

An existing 401(k) profit sharing plan defines its normal retirement age as 65. They want to add a Defined Benefit plan, and its retirement age would be 62 or if later 5 years. The plans are tested together for 401(a)(4) testing.

Can the testing age be age 62 (or if later 5 years)? Or is an amendment needed first to the 401(k) plan's NRD?

[Tom Poje]

you look like such a nice little kid, how much grief do you want?

to quote Norm Levinrad

"you’d project to 62 at the plan’s crediting rate and the normalize from there to 65 at the testing assumptions"

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this was for a cash balnce plan. so figured one set of E-Bars to age 62 using the cash balance interest rate of , lets say 4.10% to age 62. then took that e-bar and increased at the DC interest rate of 8.5% for 3 more years. gave me a head ache, heartache, pain in the side, pain in the rear and all other sorts of bah humbug that could turn anyone into a scrooge or even a grinch.

I'd make life easy and amend the NRA in the DC plan to match that of the DB. even then you would still have to make some adjustments for those ees currently age 57 or older - because they would enter the plan at age (lets say age 60) so have a retirement age of 65 for the DB, but now the DC plan is age 62, so you'd have to priject out at the DB int rate for those few folks. but I'd rather adjust a few folks than the whole lot.