The proposed IRS regs provide an example of actuarially increasing the benefit rate (from 45 to 65) to satisfy the regs.

IRC Sec 404(o)(4)(A), however, provides that in determining the cushion about for HCEs in small plans, Target Liability (TL) attributable to benefit increases occurring with the last 2 years are to be ignored.

Clearly, the accrued benefit is increased under the proposed method. However, the intent of the increase was strictly a value preserving measure and not an increase per se. That is, TL is at least in theory unchanged. My presumption, therefore, is that no amendment has occurred that cause a portion of the TL not to be counted as a result of IRC Sec 404(o)(4)(A).

Any comments?

Agree with you that the intent of the increase is a value preserving measure and therefore should not be considered an amendment for cushion amount purposes.