26A. Current benefit formulas – Cash Balance Plan

Statement of Requirement: Code §I RC 401(a)(4 );Reg. §§ ) and 411(b)(6); Treas. Regs. 1.401(a)(4)-3(b)( 4), ) and 1.401(a)(4)-12; Notice 96-8 , 1996-6I.R.B. 23; Final Regulations; T.D. 9505 , 2010-48 I.R.B. 755 ; T.D. 9693 ,201441 I.R.B. 596; T.D. 9743 , 2015-48 I.R.B. 679; Rev. Proc. 2017-41,secs. 5.18 2023-37, 9.05(1 ),5.18 ) and (2), 61 0.02 (21), 6.03(7)(a), 6.03(7)(b), 6.03(7)

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(d),6.03(7)(e), 6.03(7)(g), 72 )(f) and (m), 12.02(47); Rev. Proc. 2018-21, 2018-14 I.R.B. 467sec. 3.01; Notice 2024-2

Document Provision: _____

(Note to reviewer: A Statutory Hybrid Plan benefit formula that is not a Cash Balance Formula, such as a formula under which benefits are determined by reference to the current value of an accumulated percentage of the participant’s average compensation (Pension Equity Plan) may not be a Pre-approved Plan. Additionally, Variable Annuity Plans that include a variable annuity benefit formula as defined under Treas. Reg. § 1.411(a)(13)-1(d)(6) and plans that provide for accruals that are determined in whole or in part based on the value of, or rate of return on, identified assets, including plan assets, may not be a Pre-approved Plan.)

(Note to reviewer: Section 348 of the SECURE 2.0 Act added IRC 411(b)(6) to provide that starting with plan years beginning after 12/29/2022, for a cash balance plan that provides for pay credits to participants that increase with a participant’s age or service and provides for a variable interest crediting rate, the plan no longer risks violating the accrual requirements of IRC 411(b)(1) if that interest crediting rate falls below a certain point. A fxed annual minimum interest crediting rate is no longer needed to avoid a violation of IRC 411(b)(1) for this type of plan. No amendment may reduce a participant’s accumulated beneft. An amendment that affects interest credits may take effect only for future interest crediting rates and only apply to interest crediting periods beginning after the later of the effective date of the amendment or the date the amendment is adopted.)

1. Normal Retirement Benefit. Each participant will receive a benefit payable at normal retirement age equal to the lifetime annuity in the normal form of payment described in section ___ that is the Actuarial Equivalent of his or her Hypothetical Account Balance as of normal retirement age.

(Note to reviewer: The blank above should be filled in with the plan section that corresponds to LRM #31.)

2. Establishment of Hypothetical Account Balance. A Hypothetical Account Balance shall be established and maintained for each Participant. Additions to and reductions in the Hypothetical Account Balance shall be made in accordance with the provisions set forth below. This Hypothetical Account Balance shall be a hypothetical account for bookkeeping purposes only and neither the maintenance nor the adding of credits thereto shall be construed as an allocation of assets of the Plan to, or a segregation of such assets in, any such Hypothetical Account Balance, or otherwise creating a right for any individual to receive specific assets of the Plan. Benefits provided under the Plan shall be paid from the general assets of the Trust in the amounts, in the forms, and at the times provided, under the terms of the Plan.

When applying any statutory or Plan limitation and/or minimum benefit that is expressed in terms of an annuity to the benefit derived from the Hypothetical Account Balance, the limit shall be applied to the annuity derived from the Hypothetical Account Balance that is payable at the time and in the form corresponding to the Plan limitation or minimum benefit, determined under the terms of the Plan.

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3. Principal Credits. At the end of each Principal Credit Period in which a Participant has earned a Year of Participation in accordance with section ___ of the Plan, a Principal Credit amount as set forth in the Adoption Agreement shall be determined as of the last day of the Principal Credit Period and credited to such Participant’s Hypothetical Account Balance, whether or not the Participant remains an Employee as of that date. For purposes of determining the Principal Credit Period, if a Plan Year begins on the first day of a calendar month, a Plan Month is any calendar month. If the Plan Year begins on a day other than the first day of a calendar month, each Plan Month begins on the day of the calendar month that corresponds to the date of the calendar month that is the first day of the Plan Year. Thus, for example, if the first day of a Plan Year is January 15, then a Plan Month starts on the 15th of each calendar month. However, if a calendar month does not contain a day that corresponds to the day of the calendar month which is the first day of the Plan Year (for example, if a calendar month has only 30 days and the first day of the Plan Year is the 31st day of a calendar month), then the first day of the Plan Month that begins during that calendar month is the last day of that calendar month. A Plan Quarter is a three-month period beginning on the first day of the first, fourth, seventh, or tenth Plan Month.

(Note to reviewer: The blank in the paragraph above should be filled in with the section of the plan corresponding to LRM #29.)

If the Principal Credit is based on a dollar amount (as opposed to a percentage of Compensation) and if elected in section ____ of the Adoption Agreement, the dollar amount of the Principal Credit for a Participant for the Plan Year is adjusted as described in section ___ of the Plan.

(Note to reviewer: The first blank in the paragraph above should be filled in with the section corresponding to section 26A.I.A.(3) of the sample adoption agreement language of this LRM #26A, and the second blank should be filled in with the section of the plan corresponding to LRM #29.)

4. Interest Credits. At the end of each Interest Credit Period as designated in section ____ of the Adoption Agreement, an Interest Credit shall be credited to the Hypothetical Account Balance. The Interest Credit shall be calculated by multiplying the balance in the Participant’s Hypothetical Account Balance at the beginning of the Interest Credit Period by the Interest Crediting Rate applicable for such Interest Credit Period, based upon the stability period and the lookback month that applies for the Interest Credit Period. The Interest Crediting Rate applicable for an Interest Credit Period shall be the rate specified in the Adoption Agreement. No Interest Credits shall accrue to any portion of the Hypothetical Account Balance after the annuity starting date that applies to that portion.

(Note to reviewer: The blank above should be filled in with the section that corresponds to section 26A.I.B.(1) of the sample adoption agreement language of this LRM #26A.)

If a Plan provides for the crediting of interest more frequently than annually (for example, daily, monthly or quarterly), then the Plan must determine each periodic interest credit using an Interest Crediting Rate that is no greater than a pro rata portion of the applicable annual Interest Crediting Rate, as specified in section ____ of the Adoption Agreement. However, a Plan that credits interest daily is not treated as

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providing an above market rate of return merely because the Plan determines each daily Interest Credit using a daily Interest Crediting Rate that is 1/360 of the applicable annual Interest Crediting Rate. For purposes of determining the Interest Credit Period, a Plan Month and Plan Quarter are determined in the same manner as for the Principal Credit Period.

(Note to reviewer: The first blank above should be filled in with the section number corresponding to section 26A.I.B.(3) of the sample adoption agreement language of this LRM #26A.)

If an Actual Rate of Return is elected in the adoption agreement, the Interest Crediting Rate applied to a Participant’s beginning Hypothetical Account Balance for each Interest Credit Period shall be the Actual Rate of Return on the aggregate assets of the Plan for that period, including both positive and negative returns. If the use of Actual Rate of Return is elected in the adoption agreement, plan assets must be diversified so as to minimize the volatility of returns in accordance with Treas. Reg. § 1.411(b) (5)1(d)(5)(ii)(A). The Actual Rate of Return, which includes both realized and unrealized gains and losses, will be calculated as provided in the Adoption Agreement. Additionally, the employer may elect in the adoption agreement for purposes of the first Plan Year only of the Plan that the Interest Crediting Rate for such Plan Year shall be the fixed rate specified in the Adoption Agreement and then for all subsequent Plan Years will be the Actual Rate of Return.

If a cumulative floor is selected under section ____ of the Adoption Agreement, a Participant’s Hypothetical Account Balance as of the annuity starting date as of which the distribution of the Participant’s entire remaining vested benefit under the Cash Balance Formula commences is equal to the greater of (1) the Hypothetical Account Balance determined using the actual Interest Crediting Rate(s) that applied during the guarantee period, or (2) the Hypothetical Account Balance determined as if the plan had used a fixed annual Interest Crediting Rate equal to the rate selected in section _____ of the Adoption Agreement for the guarantee period. For this purpose, the guarantee period is the period beginning on the date selected in section ____ of the Adoption Agreement and ending on the annuity starting date as of which the distribution of the Participant’s entire remaining vested benefit under the Cash Balance Formula commences, and the cumulative floor is applied taking the value of any previous distributions into account. The annual rate selected for the cumulative floor cannot be greater than 3%.

(Note to reviewer: The blanks above should be filled in with the section corresponding to section 26A.I.B.(5) of the sample adoption agreement language of this LRM #26A.)

5. Preservation of Capital. For annuity starting dates on or after the date specified in section ____ of the Adoption Agreement, the Participant’s Hypothetical Account Balance as of the Participant’s annuity starting date shall be no less than the sum of the Principal Credits to such Participant’s Hypothetical Account Balance, reduced to reflect the value of any prior distributions. This requirement applies only as of an annuity starting date as of which a distribution of the Participant’s entire remaining vested benefit under the plan commences.

(Note to reviewer: The blank above should be filled in with the section corresponding to

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section 26A.I.B.(6) of the sample adoption agreement language of this LRM #26A.)

6. Interest Credit after Plan Termination. For Interest Credit Periods after the termination of the Plan, the Interest Crediting Rate used to determine accrued benefits under the Plan shall be equal to the average of the Interest Crediting Rates used under the Plan during the 5-year period ending on the date of Plan termination as required under Treas. Reg. § 1.411(b)(5)-1(e)(2)(ii).

7. Conversion Amendment. If any Conversion Amendment (as defined below) is adopted, then the Accrued Benefit of a Participant affected by such amendment shall not be less than the sum of:

(1) The Participant’s Prior Accrued Benefit, equal to the Participant’s Accrued Benefit for Years of Service before the Effective Date of the Conversion Amendment, determined under the pre-amendment terms of the Plan, plus

(2) The Participant’s Accrued Benefit for Years of Service after the Effective Date of the Conversion Amendment, determined under the terms of the Plan after the Effective Date of the Conversion Amendment. For this purpose, the Effective Date of the Conversion Amendment is the date indicated in section ____ of the Adoption Agreement, as modified by the definition of Conversion Amendment in paragraph 7.

(Note to reviewer: The blank above should be filled in with the section that corresponds to section 26A.II of the sample adoption agreement language in this LRM #26A. An Opinion Letter will not be issued for a plan that uses an opening hypothetical account balance as described in Treas. Reg. § 1.411(b)(5)-1(c)(3) to meet the requirements of Treas. Reg. § 1.411(b)(5)-1(c).)

For purposes of determining the Participant’s Prior Accrued Benefit under clause (1) of the preceding paragraph, such Participant’s Accrued Benefit shall be credited with the amount of any early retirement benefit or retirement-type subsidy for the Plan Year in which the participant retires if, as of such time, the Participant has met the age, service or other requirement under the Plan for entitlement to such benefit or subsidy.

Conversion Amendment. Under Treas. Reg. § 1.411(b)(5)-1(c)(4), whether an amendment is a Conversion Amendment with respect to a participant is determined on a participantby-participant basis. An amendment (including multiple amendments) is a Conversion Amendment with respect to a participant if it meets two criteria: (1) The amendment reduces or eliminates the benefits that, but for the amendment, the participant would have accrued after the effective date of the amendment under a benefit formula that is not a Cash Balance Formula and under which the participant was accruing benefits prior to the amendment; and (2) After the effective date of the amendment, all or a portion of the participant’s benefit accruals under the plan are determined under a Cash Balance Formula.

Notwithstanding any other provisions in the plan, in accordance with Code § IRC 411(d) (6), the terms of the Conversion Amendment will apply on the later of the date such amendment is adopted or effective.

(Note to reviewer: Provisions for Offsets of benefits accrued under another plan may not

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be included in a Pre-approved Plan unless it meets the following requirements:

(1) The Offset is applied on an accumulated basis at the participant’s annuity starting date, rather than offsetting each year’s Principal Credit by that year’s accruals or contributions under the offsetting plan;

(2) If plan provisions are consistent with treatment of the Cash Balance Formula as a lump sum-based benefit formula under Treas. Reg. § 1.411(a)(13)-1(d)(3), then the offsetting plan is a defined contribution plan and the Offset is applied by subtracting the account balance under the defined contribution plan from the hypothetical account balance under the Cash Balance Formula prior to converting the balance to an annuity benefit;

(3) The Offset meets the safe-harbor requirements of Treas. Reg. § 1.401(a)(4)-8(d) (except that the Offset can be computed by subtracting the account balance under the offsetting plan from the hypothetical account balance under the Cash Balance Formula), including the requirement that the offsetting plan may not be a Code §a n IRC 401(k) plan or a Code§a n IRC 401(m) plan;

(4) For the purpose of determining the amount of the Offset against any defined benefit formula, the Offset reflects the value of any distributions from the offsetting plan made prior to the participant’s annuity starting date under the Cash Balance Plan;

(5) The Offset is applied on a uniform basis for all participants;

(6) The plan provides a minimum accrued benefit to participants (expressed as a lifetime annuity commencing at normal retirement age) of no less than 0.5% of compensation for each year of credited service, which is not reduced by the Offset applied to other formulas under the plan;

(7) Accrued benefits, considered in conjunction with defined contribution accounts subject to any Offset, meet nondiscrimination requirements; and

(8) The amount of the Offset, including any procedures and actuarial assumptions for converting a defined benefit contribution account balance (under a specifically- named defined contribution plan) to an annuity amount, is definitely determinable.)

Sample Adoption Agreement Language:

26A.I. ESTABLISHMENT OF HYPOTHETICAL CASH BALANCE ACCOUNT

A. Principal Credits

(1) Principal Credits shall be allocated at the end of each Principal Credit Period, which is:

( ) Each Plan Year

( ) Each Plan Quarter

( ) Each Plan Month

( ) Each calendar year

( ) Each calendar quarter

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( ) Each calendar month

(2) Principal Credits shall be determined as follows:

Any schedule of Principal Credits must comply with the 133⅓% rule under Code § IRC 411(b)(1)(B), taking into account the minimum Interest Credits guaranteed under the options chosen in section ___ of the Adoption Agreement. For this purpose, a plan for which the Interest Credit could be negative is permitted to assume that the Interest Credits for the current and future years will be equal to zero. In addition, in the case of a plan which provides a variable Interest Crediting Rate, the Interest Crediting Rate which is treated as in effect and as the projected Interest Crediting Rate shall be a reasonable projection of such variable Interest Crediting Rate, not to exceed 6%.

Any schedule of graded Principal Credits designed by an Adopting Employer via completing blanks in the Adoption Agreement (even where parameters have been included) will not afford the employer reliance from the opinion letter that such schedule satisfies the 133⅓% accrual rule of Code § IRC 411(b)(1)(B). An Adopting Employer will have reliance with respect to the 133⅓% accrual rule of Code § IRC 411(b)(1)(B) if the schedule of graded Principal Credits used by the employer was specified and reviewed by the Service during the opinion letter process.

(Note to reviewer: The blank should be filled in with the section number corresponding to section 26A.I.B.(4) of the sample adoption agreement language of this LRM #26A.)

a. ( ) Each Participant’s Hypothetical Account Balance will be credited with ______%

(percentage) of Compensation earned by the Participant during each Principal Credit Period.

b. ( ) Each Participant’s Hypothetical Account Balance will be credited with $______

(dollars) for each Principal Credit Period.

c. ( ) Each Participant’s Hypothetical Account Balance will be credited with the greater

of:

_______% (percentage) of Compensation or

$_______ (dollars)

for each Principal Credit Period.

d. ( ) Each participant’s Hypothetical Account Balance will be credited with the lesser

of:

_______% (percentage) of Compensation or

$_______ (dollars)

for each Principal Credit Period.

e. ( ) Schedule of graded Principal Credits

Each Participant’s Hypothetical Account Balance will be credited with an amount for each Principal Credit Period, determined in accordance with the following table:

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Note: The Internal Revenue Service does not provide reliance on the opinion letter with respect to whether this formula meets the accrual rule requirements under Code § IRC 411(b).

(Note to reviewer: The above caveat only applies to a schedule following the above general format that includes blanks for the Adopting Employer to fill in. If the Principal Credits and the range being used are specified in the schedule and have been reviewed by the Service during the opinion letter process, the caveat should be deleted.)

(Example: For a plan that provides Principal Credits equal to 3.0% of Compensation for the first 10 years of Credited Service, 3.5% for 11-20 years of Credited Service, and 4.0% thereafter, the table would be completed as shown below:

(Note to reviewer: If not enough spaces are provided above, a schedule following the above general format may be specified as an addendum to the Adoption Agreement.)

(Note to reviewer: Different schedules for different participant groups following the above general format may be specified as an addendum to the Adoption Agreement. Describe the objective criteria for determining the make-up of each Participant group. Criteria may not be subject to employer discretion, which would cause the plan to fail to have definitely determinable benefits. The plan’s Participant groups may not be structured to limit participation to only the shortest service and lowest paid NHCEs while excluding other NHCEs.)

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(3) Adjustment of Principal Credit

Any Principal Credit for a Principal Credit Period that is determined as a dollar amount (and not as a percentage of Compensation)

( ) Is

( ) Is not

Reduced as described in section ____ of the plan if the Participant does not earn the full amount of Credited Service during the Principal Credit Period.

(Note to reviewer: The blank should be filled in with the section number of the plan corresponding to LRM #29. However, if the Principal Credit Period is less than one year, the above language should be adjusted accordingly. Any participant who earns a year of participation must receive a Principal Credit for that year based on their total service for that year.)

B. Interest Credits

(1) Interest Credits shall be allocated at the end of each Interest Credit Period, which is:

( ) Each Plan Year

( ) Each Plan Quarter

( ) Each Plan Month

( ) Each calendar year

( ) Each calendar quarter

( ) Each calendar month

( ) Each day

(2) If a Participant’s annuity starting date occurs before the end of an Interest Credit Period, the Interest Credit for the partial Interest Credit Period:

( ) Will be zero.

( ) Will be determined on a pro rata basis, reflecting the portion of the Interest

Credit Period before the Participant’s annuity starting date.

(3) If interest is credited more frequently than annually, Interest Credits for the Interest Credit Period are determined:

( ) If credited monthly, the annual rate divided by ( ) 12, or ( ) the rate determined as if interest were compounded twelve times each year.

( ) If credited quarterly, the annual rate divided by ( ) 4, or ( ) the rate determined as if interest were compounded four times each year.

( ) If credited daily the annual rate divided by ( ) 365, ( ) 360, or ( ) the rate determined as if interest were compounded daily.

(4) The annual Interest Crediting Rate is as follows:

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a. ( ) The discount rate on 3-month Treasury Bills plus ______ [0 to 175 basis points]

with an annual floor of ______% [floor may not exceed 5%]

b. ( ) The discount on _____-month Treasury Bills [specify duration, not to exceed 12

months] plus _______ [0 to 150] basis points with an annual floor of ______%

[floor may not exceed 5%]

c. ( ) The yield on 1-year Treasury Constant Maturities plus ______ [ 0 to 100 basis

points] with an annual floor of ______% [floor may not exceed 5%]

d. ( ) The yield on ____-year Treasury Bonds [specify duration, not to exceed 3 years]

plus _______ [0 to 50] basis points with an annual floor of ______% [floor may not exceed 5%]

e. ( ) The yield on ___-year Treasury Bonds [specify duration, not to exceed 7 years],

plus _______ [0 to 25] basis points with an annual floor of ______% [floor may not exceed 5%]

f. ( ) The yield on ___-year Treasury Bonds [specify duration, not to exceed 30 years],

with an annual floor of ______% [floor may not exceed 5%]

g. ( ) The third segment rate described below, with an annual floor of ______% [floor

may not exceed 4%]

h. ( ) The second segment rate described below, with an annual floor of ______% [floor

may not exceed 4%]

i. ( ) The first segment rate described below with an annual floor of ______% [floor

may not exceed 4%]

If g., h., or i. is chosen, complete the following:

The segment rate chosen shall be:

( ) The segment rate defined under Code § IRC 430(h)(2)(C),

( ) Reflecting

( ) Not reflecting

the adjustment for 25-year average interest rates under Code § IRC 430(h)(2)(C) (iv)

( ) The segment rate defined under Code § IRC 417(e)(3)(D).

j. ( ) The cost-of-living increase determined equal to the percentage change in the

__________ from the date of the preceding increase,

(Note to reviewer: The blank above should be completed with a description of a Consumer Price Index. The description must contain enough detail so that the Plan is definitely determinable, and must be consistent with the description of cost-of-living increases in Treas. Reg. § 1.401(a)(9)-6 , Q&A-14(b).) (o)).)

( ) plus ____ basis points [basis points cannot exceed 300]

( ) minus _____ basis points

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( ) with an annual floor of ______% [floor may not exceed 5% and may not be less

than zero]

If any rate in a. through j. is chosen, complete the following:

The Interest Crediting Rateis Rate is determined as of the:

( ) first

( ) second

( ) third

( ) fourth

( ) fifth

calendar month preceding the first day of the:

( ) Plan Year

( ) Interest Credit Period

k. ( ) The Actual Rate of Return on the aggregate assets of the Plan

If k. is chosen, complete the following:

i. The Actual Rate of Return will be determined to the following number of decimals:

( ) none (e.g., 1% or 3%)

( ) one decimal (e.g., 1.2% or 2.7%)

( ) two decimals (e.g., 1.24% or 2.75%)

ii. Employer contributions (excluding a contribution receivable) will be included based on the actual date of such contribution(s), with weighting for the period of time between the contribution date and the end of the Interest Credit Period based on the number of:

( ) days

( ) whole plan months

( ) whole calendar months

( ) nearest plan months

( ) nearest plan quarters

( ) nearest calendar months

( ) nearest calendar quarters

Additionally, in calculating the Actual Rate of Return, only distributions of benefits made during the Interest Credit Period will be reflected, and contributions receivable as of the last day of the plan year shall be treated:

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( ) as if they were made as of the last day of the plan year, or

( ) as if they were made on the day each amount was actually contributed

iii. Distributions of benefits will be included in the calculation of the Actual Rate of Return with weighting for the period of time between the actual date of distribution and the end of the Interest Credit Period based on the number of:

( ) days

( ) whole plan months

( ) whole calendar months

( ) nearest plan months

( ) nearest plan quarters

( ) nearest calendar months

( ) nearest calendar quarters

iv. The following Plan expenses incurred for the Interest Credit Period will be included:

( ) Investment expenses paid from the Plan’s Trust

( ) Administrative expenses paid from the Plan’s Trust

( ) Administrative and investment expenses paid by the Plan’s Trust

( ) Administrative and investment expenses paid by the Plan’s Trust except:

______________ (insert description of excluded expenses)

( ) No administrative or investment expenses

v. For purposes of the first Plan Year only of the Plan, the Interest Crediting Rate shall be:

( ) 4%

( ) 5%

( ) 6%

( ) Not applicable

l. ( ) Annual fixed rate of ________% interest [must not exceed 6% annually]

m. ( ) The lesser of the following rates:

________________________________________________,

or

________________________________________________:

Describe rates in enough detail so that the plan will provide a definitely determinable benefit. At least one of the rates must be a rate described in section _____ of the

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Adoption Agreement. However, to qualify for the Nonstandardized Preapproved Plan Program, the rate cannot be based on an Actual Rate of Return (as described in Treas. Reg. § 1.411(b)(5)-1(d)(5)(ii)) for a subset of plan assets, the rate of return on a regulated investment company (as described in Treas. Reg. § 1.411(b)(5)-1(d)(5)(iv)), subject to participant choice, or any rate that does not meet the requirements of Treas. Reg. § 1.411(b)(5)-1(d).

(Note to reviewer: The last blank above should be filled in with the section corresponding to section 26A.I.B.(4) of the sample adoption agreement language of this LRM #26A.)

(5) Cumulative Floor. As of the annuity starting date as of which a distribution of a Participant’s entire remaining vested benefit under the Cash Balance Formula commences, the Participant’s Hypothetical Account Balance is the greater of (1) the Hypothetical Account balance determined using the actual Interest Crediting Rate(s) that applied during the guarantee period, and (2) the Hypothetical Account Balance determined as if the plan had used a fixed annual Interest Crediting Rate equal to _____% [specify rate no greater than 3%] for the Guarantee Period. For this purpose, the Guarantee Period is the period beginning on __________ [date the cumulative floor began to apply to the plan] and ending on the annuity starting date as of which a distribution of the Participant’s entire remaining vested benefit under the Cash Balance Formula commences, and the cumulative floor is applied taking the value of any previous distributions into account.

(Note to reviewer: If a Cash Balance Plan has already established an Interest Crediting Rate, that rate cannot be changed in a way that could potentially reduce the future Interest Credits applying to a participant’s Hypothetical Account Balance already earned as of the date of the amendment without protecting the cash balance account as required under Code § IRC 411(d)(6). However, if a plan’s Interest Crediting Rate exceeded a market rate of return as defined in Treas. Reg. § 1.411(b)(5)-1(d), the rate may be reduced using the transition Regulations as provided in Treas. Reg. § 1.411(b)(5)1(e)(3)(iv), provided the amendment was made before the effective dates outlined in Treas. Reg. § 1.411(b)(5)1(f)(2)(i)(B)(1) or Treas. Reg§. 1.411(b)(5)-1(f)(2)(i)(B)(3). Generally, this means that in order to qualify for relief from Code § IRC 411(d)(6), a transitional amendment must be made before the first day of the plan year beginning on or after January 1, 2017, or as late as January 1, 2019 in the case of certain collectively bargained plans.)

(6) Preservation of Capital: Notwithstanding the above, the Interest Crediting Rate will not result in a Participant’s Hypothetical Account Balance as of an annuity starting date that is less than the sum of the Principal Credits that were credited to the Participant’s Hypothetical Account Balance, less the value of any earlier distributions. This provision applies only as of the annuity starting date as of which a distribution of the Participant’s entire remaining vested benefit under the plan commences.

( ) This requirement applies only to distributions made on or after ________ [Insert

date, no later than June 29, 2005, or the date the Plan became a Cash Balance Plan, if later.]

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26A.II. CONVERSION AMENDMENT

( ) If the Plan has been amended to convert the benefit formula from a non-Cash

Balance Formula to a Cash Balance Formula as described in section ____ of the Plan document, enter the Conversion Amendment Effective Date: ____________.

[This date is the effective date of a Plan amendment that reduces or eliminates future benefits that Participants would have accrued under a non-cash-balance formula, and provides for them to begin accruing benefits under a Cash Balance Formula, instead.

Note that if a Participant transfers from another plan or otherwise becomes covered by the Cash Balance Formula in this Plan, and experiences a reduction in future benefits that would have accrued under a non-cash-balance formula, the Conversion Amendment Effective Date for that individual is the effective date of the change described in this paragraph, if that is later than the date specified above.]