We administer a new DB plan that is offset by account accumulations in a profit sharing plan. The arrangement is not safe harbor so we will be general testing both plans.

Our volume submitter document provides no other choice than to offset DB benefits with the actuarial equivalent of account accumulations in the profit sharing plan using DB plan actuarial assumptions.

Suppose we use 6% pre and post retirement interest and 1983 GAMU for DB benefits. Other than possibly having to submit the plan as an individual design, is there a problem using different actuarial assumptions for the offset? We were thinking UP84 at 8.5%.

Thanks.

If the question is can the offset assumptions be different than the funding assumptions, the answer is absolutely, but I wouldn't think it would be reasonable to use different offset assumptions in your funding assumptions, if that makes any sense.

For example, we inherited one which bases the offset at 8.50%, but that is certainly not the rate that we use for funding of the net benefit, just for determining the net benefit.

Right now I assume your document converts the DC account balance based on the actuarial equivalents in the document. There certainly is no problem adding another section which states that for purposes of calculating the offset benefit, you use another set of actuarial equivalents. I doubt such a small change would automatically throw the plan out of VS status. Just disclose the modification to the document when you submit the plan for a determination letter.