IRS Notice 2010-83

[Guest pk1]

Section R of IRS Notice 2010-83, Restrictions on Plan Amendments Increasing Benefits, is a bit confusing. We would appreciate hearing how others are interpretting the limitation period on benefit restrcitions if a plan adopted the special amortization rule or either of the components of the special asset valuation rule.

[Guest Smash]

Quickly, I think the most agreed upon interpretation is -

The period of restriction relates to the number of years that an extended base is set up in the funding standard account. The most common iterations are -

Using MVA as asset valuation method, take the extended amortization, restriction is three years.

Using 5 year smoothed actuarial method and extended amortization, restriction is seven years.

Using 10 year smoothed actuarial method and extended amortization, restriction is twelve years.

Using only 10 year smoothing and no extended amortization, restriction is three years.

Other actuarial value of asset methods could result in restrctions up to 16 years. Most plans don't use this weird method.

Trustees can always opt out of relief prospectively, then they have to wait two more years of restriction.

People are still arguing over this.