417(e) Rate

[ERISA25]

Is there any guidance in regard to how often the applicable interest rate is compounded? Plan uses applicable interest rate for determining actuarial equivalence, so we compounded interest on an overpayment annually, but I'm not finding anything specific that says how often 417 rate is to be compunded. thoughts?

[ERISA25]

Is there any guidance in regard to how often the applicable interest rate is compounded? Plan uses applicable interest rate for determining actuarial equivalence, so we compounded interest on an overpayment annually, but I'm not finding anything specific that says how often 417 rate is to be compunded. thoughts?

It seems as though the plan document would govern on this because I am not seeing any regulatory guidance on this.

[david rigby]

It seems as though the plan document would govern on this because I am not seeing any regulatory guidance on this.

Yes. However, the plan may not say, in which case the presumption (at least by me) is annual compounding.

Caveat: Check for precedent, especially with respect to how to handle a fraction of a year.