Three year average

[SSRRS]

Hi

Owner only plan. The first year of plan is also the first year of the company. Therefore, there is at this point, only one year of salary. If the plan's benefits are based on a salary average of the three highest consecutive years of salary, how is the average determined for this first year? Thank you

[Mike Preston]

Not enough detail.

[SSRRS]

Can the run the valuation for this first year, using just the current year's salary, since this is the only salary earned at this point (as company only in.existence one year so far)?

[Lou S.]

Yes

[SSRRS]

24 minutes ago, Lou S. said:

Yes

Thank you.

[Mike Preston]

3 hours ago, SSRRS said:

Thank you.

If end of yr valuation, sure. If it's beginning of yr valuation then you should check with your actuary.

[CuseFan]

Also, plan document should specifically state how to determine FAE if a person has fewer than the number of years for the averaging period - and it's always use the compensation averaged over the service they actually have.