CB Offset

[Cloudy]

Can a cash balance plan which is part of a floor offset arrangement get whipsaw relief (statutory hybrid plan)?

[My 2 cents]

Why would anyone set up a cash balance plan to be part of a floor offset arrangement? Just wondering.

[Cloudy]

Do you mean why set up a floor offset arrangement in general, or why use a CB plan rather than a DB plan in a floor offset arrangement?

[FAPInJax]

Interesting question. There is something in the new cash balance plan rules for documents that will require that a minimum of .5% of pay per year be a positive benefit in the cash balance plan (voiding the ability to 'wipe' out the rank and file). My guess (purely) is that IF you rely on the minimum that it may be subject to 417(e) because you offset the entire account balance and then brought this minimum benefit back.

[Cloudy]

My understand from following the ACOPA listserve is that the .5% requirement after offset applies to the upcoming IRS pre-approved document, but not otherwise. That is an interesting point that you make, but I am wondering if 417e applies regardless.