Amendment to Look-back Month

[Pension RC]

I am working on a plan that the sponsor would like to terminate within the next 1-2 years. It has a 7/1 plan year and has a 2 month look-back, so the 417(e) segment rates used for distributions through 6/30/2014 would be the May 2013 rates. The sponsor would like to file the PBGC 500 in February 2014, let the PBGC's 60-day review period pass, wait until June, when the May 2014 rates are published, and to decide then if they should quickly make payouts by 6/30/2014 or, the May 2014 rates are more favorable, try to delay the payout until 7/1/2014 or later. If, in June 2014, they see that the trend is for the rates to increase, they'd like to amend the look-back month to a 1 month look-back and try to delay the payouts until June 2015 (after the one-year grandfathering period) and make payouts based upon the June 2014 rates. Is there a problem with doing this? Specifically, can the plan amend the lock-back month after the PBGC 500 submission (and 5310 submission)?

Any thought would be appreciated!

[My 2 cents]

At the point when it is time to get the participant elections, don't they have to give the participants at least 30 days to decide whether to cash out or demand the purchase of annuities? If you wait until June 2014 to initiate the payout process, how could you possibly pay people out before July 1?

Also, if the plan is terminating early enough to file with the PBGC in February 2014, how could you possibly justify delaying the payouts until the summer of 2015? Barring a delay in the IRS determination letter application, wouldn't it be mandatory to complete the distributions clean before the end of 2014 (60 days plus 180 days, which would be somewhere around the end of September or the beginning of October)?

Plus, can you change a material plan provision like that after the effective date of the plan termination? You would have to grandfather the old two-month lookback until the payout was completed, even if more than a year.