Deductible cont in under funded plan

[Guest Ken Newhouse]

An underfunded plan feezes benefits but will not terminate for several years. They would like to fund up to 110% of CL so that HCE's can take lump sums without restriction. How can this be done on a deductible basis without unrealistic assumptions? The deductible limit can bring you up to 100% of CL but how do you ever get to 110% of CL without terminating the plan?

[david rigby]

You can reasonably modify your actuarial assumptions to those required for payment of lump sums under the plan's definition of actuarial equivalent. This is especially justifiable if the plan termination is soon. Even if not, it may be reasonable to make such modification, or something close to it, now.

Another thing to do is to review the data, to see if there is any missing items, such as multiple periods of employment for any EE. This is usually important in any plan termination, so you may as well get started now. It may help you further refine exactly what your liability is.