This question or more a search for understanding then having any real practicle value, but here goes.

For a calendar year plan would it be permissible to have a OBRA rate of 6% and an RPA rate of 6.85% for the 2002 valuation. Please read 412(l)(7© for your interpretation. I think it's OK, but am curious others' opinions.

I ask the question because a colleague prepared it this way, although I would usually use the high-end of the corridor on both rates.

They must be the same. The only time they are not the same is if one is at the top of the corridor and you want to use a higher rate for the other (both don't need to be at the top of each respective corridor).

I thought that too, but with the new range for RPA in 2002 there is this new language.

412(l)(7)©(i)(III)
For a plan year beginning in 2002 or 2003, notwithstanding subclause (I), in the case that the rate of interest used under subsection (B)(5) exceeds the highest rate permitted under subclause (I), the rate of interest used to determine current liability under this subsection may exceed the rate of interest other wise permitted under subclause (I); except that such rate of interest shall not exceed 120 percent of the weighted average referred to in subsection (B)(5)(B)(ii).

So, under the old range of 90-105% the RPA limit would be 5.99% as of 1/02. 6% exceeds that amount, so you can go up to 120% of the range. What am I missing that makes this not allowable?

Actually, I amend my 5.99% to 6.00% since 100% of the interest rate is 5.71% and since 6% does not exceed that amount, I don't think it's allowable. All that for a rounding error.