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I understand that plans that have ceased benefit accruals prior to September 1, 2005 are not subject to 436 benefit restrictions. What i'm not sure of is if AFTAP certifications are required to be completed for those plans. Any help is appreciated. Thanks.

Are contributions to a 457 plan required to be included in the average benefits testing of a 401a New Comparability plan of the same employer?? And along the same lines are there separate 415 limits or does the $46,000 limit apply to the combined plans??

Are Roth 401k contributions treated the same as traditional 401k contributions with regard to non-discrimination testing?? For example, are Roth 401k contributions included in Average Benefits Testing as traditional 401k contributions are??? Thanks.

A range certification (80-100%) was certified by 4/1/08 for calendar year plan. The employer will need to waive a portion of the credit balance to reach 80% when actual certification is completed by 10/1/08. In the mean time, client may use balance of credit balance towards 4/15 and 7/15 quarterly requirments. What if, come 10/1, the amount of waived credit balance to avoid benfit restrictions is greater than originally calculated and eats into some of the credit balance that was used toward the quarterly requirements??? How is that handled?? Does employer now become late on quarterly payments?? Any help is appreciated. Thanks.

I was looking for the same article yesterday. See attached. quarterly_contr_cred_bal_use.pdf

I'm still not convinced about specifying a dollar amount of waiver, i'll have to research further. I know that the required waiver of credit balance is to the extent that benefit restrictions would not apply (80% AFTAP). just fyi, when i decrease the 2007 AFTAP to 63%, the credit balance is not large enough to waive and be at 80%. Thanks.

I was thinking about certifying the range 80-100% which would result in waiving a portion of the credit balance. How can an exact dollar amount of credit balancd be waived if the certification is based on a range?? I understand that the portion to get to 80% is required to be waived, but if that amount is not known??? My intent was to not certify a 2008 AFTAP. It looks like the 63% 2007AFTAP is low enough that even waiving the entire 13/31/07 credit balance will not increase the AFTAP to 80%. Thanks.

This is sort of a spin-off of Blinky's post. Calendar year plan, only pays benefits from fund, but does offer Full Cash Refunds and small lump sum payouts. We are currently not prepared to calculate exact PPA liabilities, but do have a work-around that provides, in our opinion, slightly higher liability amounts. 2007 AFTAP = 73% 2008 Estimated Conservative AFTAP = 72% 2008 Estimated Conserative Assets/Funding Target = 85% If i certify to a 2008 AFTAP range by 4/1/08, a portion of the credit balance will be waived and AFTAP will then be 80%. Or client can make additional contribuiton to get Assets/Funding Target to 92%. The waiver and the additional contribution are similar, reasonable, amounts. One question is once i make above certification, is the required credit balance waiver revocable upon an actual certification made by October 1??? If not, my next question is would i be better off not certifying the 2008 range on April 1 and falling back to the 2007 AFTAP less 10% which would bring me to 63%?? Benefit restrictions would apply, but since plan pays benefits from fund with small exceptions, the restrictions will not have significant impact. This keeps credit balance intact until i can calculate actual Funding Target and determine how close they really are to the 92% exception. Thanks.

Has anyone done a FAS 158 report for the second year?? Is the (Accrued)/Prepaid Pension Cost still needed and/or reported?? Thanks.

If a plan only pays benefits from the pension fund (no lump sums or annuity purchases) and the plan will be less than 80% funded based on the 2007 lookback AFTAP, is the employer required to provide participant notices even though in reality there are no benefit restrictions since benefits are only paid from the fund? Thanks.

A X-tested PS plan was set up effective 1/1/08. Client now says he intended to exclude a certain group of employees from participating. The data for the excluded group was never provided during the proposal and plan set up process. Some fo the employees in the group have been employed for a few years, but none has ever worked more than 1000 hours and possibly never worked more than 500 hours. The plan currently has no age or service requirements for eligibility or to receive an allocation. If the plan is amended to exclude the group effective 2/1/08, they will receive an allocation for January of 2008. For rate group and average bfts testing, can the excluded group be excluded from testing since they never worked 1000 hours and thus would not have met the statutory eligibility requirments of age 21 and 1 year of service?? Thanks.

I seem to be receiving conflicting answers. Do deferrals to a 403(b) plan (other than an educational organization or hospital) count against the 415 limit for DC plans?? Thanks.

403(b) plan with New Comparability PS. Since the 403(b) salary deferrals are not subject to ADP testing, are they required to be included in the average benefit test with the PS allocations?? Thanks.

I am also new to 403(b) plans. If they contain a new comparability employer contribution allocation, are the 403(b) deferrals required to be part of the average benefits test?? Thanks.

Since one of the two plans will be a new comparability plan and all people will be included for nondiscrim testing, wouldn't that mean that the minimum gateway requirements would apply to the eligible participants of Employer B??? Thanks.

I've seen some similar postings but not sure if theyr'e on point. Employer A maintains Plan X, traditional 15% of pay PS plan, no 401k. Employer B maintains Plan Y, traditional 401k with match, doesn't make additional ER contr. Employer A acquires Employer B. Does the controlled group transitional period apply if Employer A changes the PS allocation to a New Comparability design?? If so, does that mean that the 401k provisions can be applied to Employer B without providing such provisions to Employer A and if so desired are employees of Employer B not required to receive minimum gateway allocation due to the New Comparbility allocation of Employer A?? Any help is greatly appreciated. Thanks.

Thanks for the response. I'm going to have to let it sink in before responding with additional questions or details.

Would an allocation schedule with tiers based on (2 times Service) plus Age still be allowed to meet minimum gateway requirement by meeting the smoothly increasing criteria??

I have a prospective New Comp plan that is considering a Roth 401k feature. Do the Roth 401k deferrals effect the employer contribution to the New Comp plan any differently than they would if they were from a traditional 401k plan with regards to limits and testing?? Thanks.

I realize what PPA is doing, however, i am refering to pre-PPA. Is there a cite that might mention why it would have been unreasonable to use, for example 30 year treas rates as interest assumptions for valuation purposes.

A non-profit client asked about funding the plan on a plan termination basis rather than on an ongoing basis using long term assumptions. I thought there was a reg or rev rul or rev proc about not allowing funding on a termination basis, but i can't find it. Does anyone have a cite??? Thanks.

An auditor used the term "fully benefit responsive" as opposed to full market value when discussing assets of a 401k plan. Has anyone heard this term, and if so what does it refer to?? Thanks.

Does the fact that a profit sharing plan has a requirement that a participant be employed on the last day of each quarter (allocations calculated quarterly) to recieve an allocation of an otherwise uniform formula make it a non-uniform formula and subject it to discrimination testing?? Any reference cite is greatly appreciated. Thanks.

The PBGC instructions for ACM filers say assets are market value as reported on line 2a of the 2006 Schedule B, which for our plans do not include receivables or payables. The current liability amounts, however, reported on the 2006 Schedule B are net of payables. Should payables be added back into the liabilities?? Is anyone else having issues with the new asset reporting method for PBGC purposes?? Any help is appreciated. Thanks.

Does anyone know if Church Plans are exempt from Minimum Funding requirements of PPA?? I know they are exempt under 412, but PPA is 430. Thanks.