Cash Balance crediting rate and MAP 21

[John Feldt ERPA CPC QPA]

Suppose a cash balance plan defined its crediting rate as the 3rd segment rate, which was added as a safe harbor rate in the hybrid plan regulations.

MAP21 now adds 430(h)(2)©(iv) which modifies all 3 segment rates, as necessary, to be this new 25 year average, with the "as necessary" referring to the corridor.

If the plan document's language directly referred to Internal Revenue Code Section 430(h)(2)©(iii) for the 3rd segment rate, does the presence of this new rule under ©(iv) now indirectly change the plan's crediting rate to the MAP21 rate?

In order to preserve the old actual 3rd segment rate as the plan's crediting rate, would an amendment be necessary?

[SoCalActuary]

I would agree that the proper and safe thing to do is to add an amendment clarifying which interest rate is chosen.

The justification of course is to clarify the reference to the law.

I will be making that recommendation to my CB clients who use such rates.