If a top heavy db plan is converted to a cash balance plan, does anyone know of minimum required accruals for such a situation? I have not seen this addressed anywhere.

Since a cash balance plan is a DB plan, then the DB plan minimum would apply. No special T-H handling for cash balance plans. I would look to the plan's definition of Accrued Benefit.

The T-H regs in 1.416 Q&A T-26 state that no actuarial assumptions are mandated for testing the present value of accrued benefits. "The assumptions must be reasonable..."

In our office, we often define this in the plan document, using 5% and the 1983 GAM. Note that unisex mortality is not required here.

Q&A T-25 thru T-28 are worth rereading.

pax, i understand what you're saying and i will look further at regs, but since a cb plan accrues as % of pay instead of in an annuity form, i wasn't sure what the required accrual was. it appears to me that the employee may have to get a cash accrual equal to the act. equiv of a 2% of pay annuity accrual. does that make sense to you?

Actually, a cash balance plan has a ficticious account that "accrues" at a rate given in the plan, usually involving an interest credit and a service credit. But the plan still should have a DB accrued benefit underlying the account balance. The PV of that is tested for T-H, with the possibility that the account balance is also a minimum to that PV.

Gary, I'm curious. Most T-H plans are small, usually under 50 lives (although we have one in this office with about 200 actives). Do you have a situation where a sponsor is adopting (or considering) a CB plan and is also likely to be top heavy? (So far, I have not seen any CB plans of small employers.)

This is a db plan with a little < 100 lives, is t-h and is considering a cb plan. Assuming it continues to be t-h then my point is is that the account bal would then have an equiv annuity benefit and that a 2% accrual is required and then the new annuity could be converted to this equiv acct balance. That is my impression at this point. Thanks Pax