plan amendment

[Gary]

a plan wants to make an amendment to increase the benefit of a participant.

the plan has 3 participants, all HCEs

they would like to amend plan to increase the benefit of a deceased participant up to the 415 limit. the spouse has not yet received the pension.

So his benefit is 5k per month and 415 limit is 8k, can the benefit be increased thus increasing what the survivor will receive?

thanks

[Effen]

Assuming the AFTAP is ok, why would you think this would be a problem? Plans get amended all the time to raise benefits for retired participants and beneficiaries.

[david rigby]

While this might be OK, prudence indicates a very close inspection of the document first to ensure no conflicting terms.

[Gary]

yes the plan can be amended.

i got word that this was a plan that was tested on a combined basis with a profit sharing plan that contained one NHCE.

My question re: testing for deceased former employee is if we increase his benefit, then in the denominator for testing compensation do we use his final year compensation? the plan tests on the annual method using plan year compensation.

thanks