I currently have a end of the year cash balance plan. The AE interest rate is the 30 year treasury with a 3 month look back. The interest rate for crediting interest is also the 30 year treasury.

How complex would it be to change from the 30 year treasury to 417(3) 3rd segment rate?

Since it will be a cold day in Hades before the IRS considers the third segment rate to be anything close to a market rate of return for this purpose, I would say quite difficult indeed. Did you mean the first segment rate?

yes, how about the first rate?

The complexity arises from having to grandfather the prior interest rate for the cash balance and optional forms of benefit accrued through the point of change. At least that is what is being espoused throughout the land at this point without final regulations to hang your hat on.

If the CB plan is relatively new, complexity decreases because it could be easily determined that under any circumstance the grandfathered benefit is less on all fronts. However, if that determination is not easy, then the complexities arise with exactly how to determine what is grandfathered. Is it the methodology that's grandfathered, meaning that one must track a separate CB/optional forms in perpetuity considering the ever-changing 30-year rate? Is it the interest rate in effect at the time of the change, meaning the 30-year rate is considered at the point of the change. I am not sure of the answer.

The proposed CB regs offer a 411(d)(6) free pass for changes from the 30-year rate to the third segment rate described in section 430(h)(2)(C)(iii) (determined with or without regard to the transition rules).

One other note, changing to any segment rates under 417(e) is not one of the safe harbors under the proposed regs. They warn you not to change to a rate outside of their listed safe harbors, or suffer the penalty of a force of angry IRS agents at your door.

Just to clarify a point here, the third segment rate described in 430(h)(2)(C)(iii) is a a safe harbor definition for a market rate of return, according to Notice 2007-6.