EGTRRA revisit

[Gary]

In looking at a prior EGTRRA amendment a plan sponsor filled out a section stating that they will not increase 415b limits and will retain pre-EGTRRA 415b limits.

Well what exactly does this mean?

Does it mean that accruals through the 2001 plan year cannot be adjusted by new limits and post 2001 accruals are based on the new EGTRRA limits?

Or is the entire accd benefit subject to pre EGTRRA limits? If that is the case then what is the DB limit for someone with a 12/31/2010 retirement at age 62 with 10 yeares participation? That is, not 195,000, but instead the 140k limit in 2001 increased by COLAs?

thanks

[SoCalActuary]

You can amend a plan now to remove that election. Just be aware that it is a plan amendment that increases benefits to HCEs/Keys, so you do have discrimination testing.

Otherwise, you do use the old limits and it is debatable whether you get to apply indexing to the $140,000. Some say no increase is allowed.