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If the 2009 AFTAP is not certified, i believe effective 10/1/09 the certified AFTAP would be deemed to be less than 60%.

It is my understanding that as long as there was not benefit restriction prior to the 2009 AFTAP being certified, the restriction is effective the date of the certification of the 57.1% and the employer has 30 days to issue the notice.

I understand that, thanks. My issue is that under the proposed regs i would probably recommend that most of my clients go with one of the segment rates to reduce volatility in the itnerest rate basis and if they do that many of them will be facing benefit restrictions due to an AFTAP of less than 80%. I am then wondering what will happen if the final regs are issued with the provision that employers may change interest rate basis for the 2010 year. I would have then recommended going with the October spot rates for the 2009 valuation and those plans would have no benefit restrictions. I'm wondering if there will be an allowance to recertify even if it resulted in a material change in the AFTAP or if the AFTAP deadline might be extended. I am prepared to issue AFTAPs but am waiting as long as i can (up to 9/30) in hopes the final regs are issued sooner rather than later.

it sounds like line 38 would be $50,000. Line 19c would be the $150,000 (the actual discounted value of contribuitons for the plan year) which would be the same as line 37.

We've been holding off on certifying in hopes of getting funding relief in the form of automatic approval for changes in funding elections from 2009 to 2010 plan years, specifically the interest rate basis. We are certifying AFTAPs for plans that will be at least 80% under either the seg rates or the full yield curve and if we have to we will recertify later since it won't be a material change. For plans that are over 80% on the FYC and below on the seg rates we have not issued AFTAPs yet. So if you have certified AFTAPS that are less than 80% based on segment rates and the final regs give automic approval as mentioned above will you be changing your 2009 funding elections and/or AFTAP certification???

I'm just trying to get an idea of what people are doing with regards to certifying 2009 AFTAPS for calendar year plans in the absence of final regulations. Are they being certified and if so on what basis??? Thanks.

[ First, is your client plan electing coverage under 414(e)? If not, why does ERISA even apply? Second, if your client elects coverage, then you look at the IRS sections that would apply to it. 401(a)(4) is not on that list. My plan is a non-electing Church Plan. However, it is my understanding that while they may be free from compliance with ERISA, they must comply with some IRS regulations, including 401(a)(4) and (5). Please advise if this has been changed in the recent past. Thanks.

I assume you are discussing a church plan that has elected ERISA coverage. Otherwise, your answer is easy. 414(e) specifies the sections of the IRC that apply to electing church plans. I don't see 401(a)(4) on that list. Maybe I'm wrong, but I don't see where the 110% rule under 1.401(a)(4)-5 is ever applicable to church plans. I still don't see in either section exempting church plans from 110% test. I"m not sure why they would be exempt. Thanks for the input.

Only a little.

Since church plans are not subject to IRC 430 i was curious to see how others are calculating the liability for the 110% test post-RPA. Also, are church plans subject to IRC 436?? Thanks.

I agree that each plan is different and my intent wasn't a blanket statement, but again, if i see a plan that has a large FSCOB I will generally recommend during said four hour meeting/conference call that there should be no addition to the PFB for the reasons you mention above. Not always, but generally. IMHO the PFB only helps if it will be applied toward the funding requirement, otherwise it hurts the funded status under all scenarios (AFTAP, FTAP, use of CB as mentioned above, shortfall exemptions). And if you have a large FSCOB, that is what will be applied to the funding requirement first, so your PFB will then continue to increase and continue to work against the funding ratios and you can't burn it unless you have no FSCOB. Again, i agree that each plan is different and adding to the PFB may or may not be beneficial for any given plan.

Actually in a situation like this i would more likely consider using the June 2009 contribution for the 2009 plan year rather than the 2008 plan year. But the reason i wouldn't add to the PFB is to keep the funding ratio of Assets less PFB as high as possible if you aren't likely to need the PFB anytime soon.

If the plan is well funded and/or has large Carryover Balance you may wish to not add the excess contributions to the prefunding balance.

Turns out that Mr. Holland and Mr. Deutsch are doing a session together at teh ACOPA actuarial symposium next week in Chicago. Should be interesting. Hopefully this issue will be resolved then.

I agree and i wasn't the only one questioning Mr. Holland. He was trying to find the cite but didn't want spend the conference time. I e-mailed ASPPA recently to ask if this issue was ever resolved and have yet to receive a response. I was also going to e-mail Larry Deutsch.

Jim Holland said it at the ASPPA Norhteast Bfts Conference in NYC three weeks ago and Larry Deutsch said it in his ASPPA webcast yesterday afternoon. Larry Deutsch said it was part of technical corrections, but i still don't see it.

I have heard Jim Holland state and now i've heard someone else say that if the plan's 2008 FTAP is at least 92% quarterly contributions are not required for the 2009 plan year. I can not find any cite that applies the transitional funding levels (92%, 94%...) to the definition of funding shortfall for quarterly purposes, only for the exemption of shortfall amortization charge (and also in 436). Does anyone have a cite that says the transitional levels can be applied to the FTAP for quarterly requirement?? Thanks.

Thanks. Its also on page 1416 of Volume 2 of the 2009 CCH books.

I have a similar situation. With regards to the bold portion above, what interest should the 2007 deficiency be brought up with and from what date? Thanks.

I hate to revisit this topic, but i'm still not sure which way to go with this. It seems the concensus of this board is that if for a 2008 calendar plan year with quarterly conbtribution requirements, a credit balance election is made in April of 2009 to apply the entire 2008 funding requirement and no cash contributions are made, the funding requirement is met and there is no penalty discount for late quarterly contributions since any credit balance in essence applies the credit balance as of 1/1/08. However, it seems to me that the proposed regs say that the quarterly contribution is deemed satisfied on the date the credit balance election is made, and if late, a penalty discount would apply. I also realize that final regs may confirm the concensus of the board, but until then is there any cite or publication that is being relied upon to support the concensus? Thanks.

Thanks. I agree, i also haven't seen any guidelines on this matter. Thanks again.

I received no responses in March but the issue has resurfaced so i will inquire again. Any response would be appreciated. Thanks. The Form 990 includes a section where Officers, Directors, Trustees, Key EEs and HCEs need to be listed disclosing compensation amounts. One of the items includes "The annual increase in actuarial value of a qualified defined benefit plan, whether or not funded or vested". Has anyone seen this and does anyone know what actually needs to be reported?? Thanks.

If an Enrolled Actuary issues Statements of Actuarial Opinion on ERISA plans as well post-retirement medical benefits, it looks to me like he/she must meet the new Qualification Standards, that is, 24 hours of credit for 2008, 30 for each year after 2008, and does not qualify for the EA exemption. Is that correct?? If not, what are the current qualifcation standards for such an EA? Thank you.

Thanks for all responses.

New Comparability calendar year plan has two allocation groups, each with an allocation % defined in the plan document. No hours requirement or last day rule to receive an allocation, basically if you work an hour of service you're entitled to an allocation. Employer would like to amend plan to remove the fixed allocation percentages and make contribution amount discretionary and only provide defined contribution amounts up to the plan amendment effective date. Can this be done during the plan year? It has been my understanding that once a participant meets the requirements for an annual allocation he/she must receive the allocation amount in the document at that time. Thanks.