Stash026 Posted October 23, 2019 Posted October 23, 2019 Is the approved interest rate when calculating an EBAR in a Cash Balance Plan still between 7.5% and 8.5%? I was discussing this with someone and know that used to be the acceptable range, but I wasn't sure if that had been changed or indexed. Thanks!
C. B. Zeller Posted October 23, 2019 Posted October 23, 2019 That is still the definition of "standard interest rate" in 1.401(a)(4)-12 ugueth 1 Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance. Corey B. Zeller, MSEA, CPC, QPA, QKA Preferred Pension Planning Corp.corey@pppc.co
Cloudy Posted October 25, 2019 Posted October 25, 2019 Assuming you are doing annual testing on a benefits basis, project the CB pay credit to retirement age using the CB interest crediting rate defined in the plan for the testing year (not a testing interest rate) and divide that result by an annuity factor at retirement based on the plans definition of actuarial equivalence. Divide that by testing compensation to get the CB EBAR. That assumes testing age equals retirement age.
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now