Dinosaur

I am preparing a 1/1/2010 valuation. You accrue a benefit if you work at least 1000 hours in a plan year. If we freeze the benefit accruals as of April 30, 2010 (adopting the amendment some time this month) there would be no benefit accrual in 2010. So when running the 1/1/2010 valuation I would think that there would be no Target Normal Cost for 2010. Does this seem right or would the Target Normal Cost be prorated by 4/12?

I have a short plan year (7/1/2009 to 12/31/2009) beginning of year valuation. I could only find in the regulations that the amortization payment is prorated for the short plan year. Did I miss it or is the Target Normal Cost for the full year (not prorated)?

I am hoping that this the case but I can't find it anywhere in the regs, etc. specifically regarding a CBA. IF the CBA were not renewed then the there would be no future accruals. So a new CBA would effectively increase the benefits. Any other thoughts?

any comments out there?

We are running a plan with a 11/1 to 10/31 plan year. There are about 110 participants in the plan. We prepared the 11/1/2009 valuation and the AFTAP is about 76%. The current Collective Bargaining Agreement (CBA) runs out in September, 2010. The new CBA may keep the same benefits as in the prior CBA. Since the AFTAP is less than 80%, the plan cannot be amended to increase benefits until the AFTAP is at least 80%. If the benefits in the new CBA are kept the same (and not increased) and the current CBA is that considered an increase in benefits? I am thinking that it is an increase since the CBA ran out but I want to make sure. Also, what date would you do the APTAP calculation to make sure that it is at least 80%. Would you run a projection of the AFTAP as of 11/1/2010?

That is all he asked about was a small plan. my mistake

It would be 4/30/2010 only if it is a small plan (< 100 participants).

Preparing a 1/1/2009 valuation that results in an AFTAP of 57.1%. A notice of benefit restriction must be provided to participants to notify them that the benefits are frozen under the plan and that they cannot elect a lump sum distribution if they terminate/retire. On the notice of benefit restriction what date is the effective date that the benefits become frozen ? 1/1/2009? current date?

So, any ideas on what to do? What did people do in this situation? The 2008 contribution has to be made by 9/15 Would it make sense to use some amount of the COB so that increasing the COB by the EIR from 1/1/2008 to 4/15/2008 and by (EOR +5%) from 4/15/2008 to 9/15/2009 so that it would increase to $5,000 (amount of the installment)

The valuation date was changed from 12/31/2008 to 1/1/2008. The Schedule C income for 2008 was very low compared to prior years so I need to use some of the carryover balance (COB) to offset minimum required contribution (and apply towards late quarterly contributions due to high COB) Does the plan sponsor have until the filing of the 2008 Schedule SB to make this election? I believe I have until the filing of the Schedule SB to use some of the COB to offset the Minimum Required Contribution but didn't know if it was different due to the late quarterly contributions. Say each quarterly contribution installment is $5,000, the EIR is 6%, the plan has over $200,000 in COB as of 1/1/2008. Would I do the following: -first installment due 4/15/08: use $4,916 of COB as of 1/1/08 since $4,916 x 1.06^(3/5.12) = $5,000 -second installment due 7/15/08: use $4,844 of COB as of 1/1/08 since $4,844 x 1.06^(6/5.12) = $5,000 and so on?

Thanks Steve. I forgot about that.

I am preparing a 1/1/2009 valuation and calculate an FTAP/AFTAP of about 53.0% A deemed election will not bring it up to 60% so I'm stuck at 53.0%. Since < 60%, benefits are frozen and no lump sums are allowed. How is this reflected in the valuation? Do I just do the valuation as in the past. It doesn't make sense that there would be no accrual (no TNC) for the 2009 year. How about showing benefits to participant?

So, looks like deemed election to 80% and a voluntary election (by plan sponsor) after that. Thanks everyone.

I agree that the reference I found regarding 100% does not make sense.

Where did you read this??? 1.436-1 under 5i (Deemed election to reduce funding balances). I think it's saying that if there is a benefit limitation under paragraph (d) (which is accelerated benefit payments) then you reduce the COB/PFB as necessary to get to the applicable threshold (60, 80 or 100) in order for the benefit limitation not to apply.

I've read that you would have a deemed election to get to 60%,80% or 100%. If you are at 80% then there are no restrictions under 436 (as far as I know). When would you do a a deemed election to get to 100% if there are no restrictions if you are 80%?

I am preparing a 1/1/2009 valuation. I first calculate an FTAP (after subtraction of the COB/PBF) balances of 65%. I can get an AFTAP of 100% if I there is a deemed election of all the COB and part of the PFB. Must the deemed election go only to 80% or all the way to 100%? Or if I am at 93.5% must a deemed election be done to get to 100%?

You are correct Effen Is a Notice of Benefit Restriction (AFTAP <80% or <60%) (not an AFN) required if a plan is non-PBGC. I don't see anything so I am I correct in assuming that non-PBGC plans along with 1 person plans require a Notice if the AFTAP is <80%?

I have 2 questions: I have a 1 person plan with an AFTAP of 65% as of January 1, 2009. Is a Notice of Benefit Restriction required since only 1 person? I couldn't find anything that excluded the 1 person plan from providing a notice. Also, what about a plan (also with an APTAP of 65%) that is non-PBGC. Is a notice required? Since the restricted amount has to do with the limits of the PBGC would this plan have to do a notice? I would think it would since I couldn't find anything that excluded non-PBGC plans.

We have a PBGC covered plan that terminated in 2008 (received IRS and PBGC approval) and assets were distributed in December, 2008. I am preparing the final Form 5500 with Schedules. Is the Annual Funding Notice required for 2008 since there are no participants as of December 31, 2008?

Thanks Andy

Running a 1/1/2008 val (just switched from EOY val since 2008 contribution too high). A deemed election will occur to bring the AFTAP to 80%. Say this deemed election reduces the carryover balance by $30,000. So, carryover balance is reduced from $50,000 to $20,000. Is the remaining $20,000 carryover balance used to calculate the 430(f)(4)(B) assets for the shortfall amortization payment? I would think so but just checking.

Thanks Tom and SoCalActuary

Thanks SoCalActuary I googled her but couldn't find her website. Do you have it handy?

Are they many out there electronically filing the Form 5500, etc using EFAST? We have not tried it yet. It's not required until the plan year beginning in 2010 (or it is 2009?) but I was wondering if has been a time consuming process. Some clients, especially small ones, like to receive the forms in the mail, sign it, mail it and not have to deal with applying for an e-signature. We use Relius to generate our Form 5500's. Also, how about attachments. How are the attachments sent with the filing?