RP 2017-56 - val date change for terminating DB Plan

[Jakyasar]

Hi

Calendar DB plan with EOY valuation. 1 Lifer

Date of termination 4/1/2022.

Need to run the final val. 

Under automatic, is my new val date 1/1/2022 or 4/1/2022? I think either is fine but want to double check.

Thank you

[Nate S]

I see no reason to go to the hassle of changing the val date, stick with 4/1 and treat the final accrued benefits and final assets as such.  Remember, valuations can't consider future events so a 1/1 valuation would ignore the 4/1 termination and treat 2022 a full year for purposes of the minimum funding determination.

[C. B. Zeller]

31 minutes ago, Nate S said:

I see no reason to go to the hassle of changing the val date, stick with 4/1 and treat the final accrued benefits and final assets as such.  Remember, valuations can't consider future events so a 1/1 valuation would ignore the 4/1 termination and treat 2022 a full year for purposes of the minimum funding determination.

On the other hand, you already have the accrued benefits and assets as of 1/1/2022 thanks to the 12/31/2021 valuation, so it might be less work to use a BOY date.

OP didn't mention whether the plan had been previously frozen; if so there is no concern about additional accruals for a 1/1 valuation. If not, then a 412(d)(2) election will allow you to take the freeze and termination into account for the 1/1 valuation.

[Jakyasar]

Thank you both for your comments. As I have no required contributions for either BOY or 4/1, I can pick either.