401(k) Plan as an offset

[mphs77]

I have a client who would like to have his 401(k) plan be an offset to a new DB Plan. The DB plan he would like to have would be a 412(e)(3) plan. If this is the final design, would the 401(k) Plan be required to offer insurance as an investment of the trust (or as an insured death benefit) as the DB Plan has life insurance as a part of the funding under 412(e)(3)?

[MWeddell]

Seems to me that this would definitly violate the contingent benefit rule in the 401(k) plan (assuming that you are talking about having the whole 401(k) plan account balance, not just the employer nonmatching contribution aaccount, be the offset).

[mphs77]

No, not the whole account balance. I am just curious if the benefits, rights and features provisions will require insurance in the DC Plan.