Cloudy Posted May 5, 2017 Posted May 5, 2017 Traditional DB formula of [52.5% (AMC) + 12.5% (AMC-CC)] x Part/25, fractional accrual Partic. / Total Partic. Does this formula satisfy the requirements for a designed based safe harbor?
My 2 cents Posted May 5, 2017 Posted May 5, 2017 It's a Friday afternoon (with all that implies concerning the acuity of my thought processes), but I can't think why it wouldn't be. Always check with your actuary first!
Cloudy Posted May 5, 2017 Author Posted May 5, 2017 I am wondering whether 35 years is required because of the excess piece.
My 2 cents Posted May 5, 2017 Posted May 5, 2017 While it is later still on a Friday afternoon, I don't think that you have to go with 35 years for the prorata step-rate formula to be safe harbor. I still think the formula you originally described ought to be a safe-harbor formula under the 401(a)(4) regulations for defined benefit plans. Always check with your actuary first!
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