pensionam Posted February 15, 2019 Share Posted February 15, 2019 I have a DB plan that has an initial short plan year. The effective date of the plan is 7/1/2018 and the actuarial valuation date is 12/31/2018. Does the deduction for 2018 need to be prorated? Link to comment Share on other sites More sharing options...
shERPA Posted February 15, 2019 Share Posted February 15, 2019 No, full amount should be deductible. See PLASTIC ENGINEERING & MFG. CO. v. COMMISSIONER. An amortization base payment is pro-rated since it is based on a period of time, but TNC for the benefit accrued for the plan year is not pro-rated. I carry stuff uphill for others who get all the glory. Link to comment Share on other sites More sharing options...
pensionam Posted February 15, 2019 Author Share Posted February 15, 2019 33 minutes ago, shERPA said: No, full amount should be deductible. See PLASTIC ENGINEERING & MFG. CO. v. COMMISSIONER. An amortization base payment is pro-rated since it is based on a period of time, but TNC for the benefit accrued for the plan year is not pro-rated. Thank you! I did see this before on a previous post but I always tend to second guess myself and our actuary thought this was the case but was not certain. Link to comment Share on other sites More sharing options...
AndyH Posted February 15, 2019 Share Posted February 15, 2019 Why wasn't the effective date of the plan set as 1/1/2018? Link to comment Share on other sites More sharing options...
pensionam Posted February 15, 2019 Author Share Posted February 15, 2019 1 hour ago, AndyH said: Why wasn't the effective date of the plan set as 1/1/2018? Owner wanted to exclude employees terminated prior to 7/1/2018... Link to comment Share on other sites More sharing options...
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