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I'm not sure HATFA or 2014-53 references the Annual Funding Notice, unless you think by being an extension of MAP-21 it is implied.

Thanks for the responses. So David, when you say "as I read it", what are you reading? Thanks again.

Since the passing of HATFA did not bring anything new to Annual Funding Notices, we have continued to use the original MAP-21 rates to determine the funding target for purposes of the Funding Target Attainment Percentage for the Annual Funding Notice. Since HATFA is an extension of MAP-21 we have been wondering if these amounts should be based on the HATFA rates instead. Curious to know what other are doing in this regard. Thanks.

SSAP 102 was effective 1/1/13. In determining the amount of surplus, SSAP 102 generally called for the immediate recognition of unfunded PBO as a liability. However, SSAP 102 contains an option under which it allowed for the recognition of the unfunded PBO to be phased-in over a period of up to 10 years. Under this alternative, SSAP calls for the establishment of a schedule of the maximum unrecognized amount of unfunded PBO that can exist at year-end. Essentially, the Pension Expense for the year is increased by the 10 year phase-in amount. If, at any point in time, a company wants to voluntarily recognize an additional amount of unfunded PBO (above the 10 year phase-in amount that is recognized for that year according to the amortization schedule), does this additional amount reduce the unrecognized gain/loss that exists at that time? Thanks.

WE are not trying to do anything to the participants, this is kind of a third party question that came to my boss and he asked me to put it on BL message board. I think the premise of the question goes toward how service might be counted, along the lines of the old Same Desk rule and such.

Trying to see if participants would have any legal leg to stand on in such a transaction.

In the for profit world there are stock sales and asset sales. Is there an equivalent to a stock sale in the non-profit world? Specifically a Church plan? Thanks.

Per HATFA guidance, section IV.A. an employer may reverse an election to reduce funding balance for the 2013 plan year under 1.430(f)-1(e) if the election was made by 9/30/14. It seems that 1(e) refers only to waiver of funding balances and not election to apply funding balances towards meeting the 2013 minimum funding requirement. At least one summary published has indicated that this reversal would be available for elections to apply funding balances toward the funding requirement as well as waivers despite how the guidance reads. Has anyone come across this issue yet? And if so, what was your interpretation and result? Thanks.

Even though decisions on credit balances for the 2012 plan year may have been based on funded status at 1/1/13, it seems that HATFA does not allow changes in those elections, for example a plan that is now better funded at 1/1/13 under HATFA can not add some of the 2012 excess contribution that was not added under MAP-21. Does anyone see this differently? Thanks.

Do we think treatment of 110% test changes (lifting restrictions) should/will be treated similarly to changes to AFTAPs due to the HATFA rates?

1/1/14 Pension Expense calculated using a 4.5% discount rate. Settlement threshold based on 1/1/14 Pension Expense is $1.0M. Lump Sum of $1.2M paid effective 6/1. Plan sponsor performs settlement accounting as of 6/1 rather than end of year. As part of settlement accounting, obligations are re-measured at a 4.00% discount rate. A few questions: Is pension expense re-measured as of 6/1/14 at 4.00%? Is the resulting total year Pension Expense a combination of 5/12 of the Pension Expense determined at beginning of year at 4.50% plus 7/12 of the Pension Expense determined at 6/1/14 at 4.00%? After the settlement accounting, does every subsequent lump sum trigger settlement accounting (because the threshold for the year has been crossed) or is the slate wiped clean and the plan sponsor starts building anew toward meeting a new threshold and a second settlement accounting for the year is performed only if subsequent lump sums exceed the new threshold? What is the new threshold? Is it based on the Service Cost and Interest Cost at 4.00%? And is it full year amounts or pro-rated amounts for 7/12 of the year? Thanks in advance for all responses.

I don't know about the annual payments, but with regard to interest and funding target, we think the interest should be decided by the employer. We discuss and provide some options, most go with the effective interest rate of the lump sum calculation. As for the funding target, we use the remaining balance of the lump sum on the valuation date.

Found a Gray Book question, 2003 #24, which says the payment are not eligible for rollover. No details in the answer, just "No".

Just to amend my last post, I guess the period of payment is usually scheduled to be at least 10 years, but as mentioned, the balance of the lump sum could be paid at any time, if and when the plan comes out of restrictive status (or terminates).

Thanks for the responses. So it doesn't seem to me that the draw down of the lump sum is "over your life or life expectancy", it's over the life of the lump sum (with or without interest). But it could be, and usually is at least 10 years. Not sure what i'm getting at, but just thinking out loud.

What am I missing? What's the DQ event? The HCE elected a lump sum. Since plan fails 110% test, he is receiving a monthly annuity from plan instead of the lump sum. Wouldn't that monthly draw down of the lump sum still be considered part of the lump sum which otherwise would have been eligible for rollover?

HCE elects a lump sum option, but plan fails 110% test, participant receives monthly draw down of LS amount. Is the monthly benefit eligible for rollover? Thanks.

And maybe just to play devil's advocate, why wouldn't the monthly payment be considered part of a settlement?? It's a distribution that is reducing the obligation??

Thanks. And yes agreed that settlement accounting may is permitted if settlements are less than SC and IC.

If a 403b Church plan has a service based matching allocation formula, is the matching formula subject to the availability test or is it exempt as a Church plan? Thanks.

When determining whether Settlement Accounting is needed, are monthly benefits included in the distributions that are compared to the Service Cost plus Interest Cost or only lump sums and annuity purchases?? Thanks.

Does anyone know who far out (decimal places) the MAP-21 rates go before being rounded (after applying the corridor) and are they rounded to nearest or up or down? Thanks.

Employer has a 401k and a 403b plan, deferrals and match only. May and/or must the plans be combined for 410b testing. Also, not sure what to ask about ADP and ACP testing since no ADP testing for 403b plans. Any help would be greatly appreciated. Thanks.

401k plan has different entry dates for salary deferrals, matching and new comparability employer base allocation. Salary deferral is most liberal down to least liberal for employer base allocation. Compensation is defined as "date of entry" comp for all three sources. Our software (ASC) doesn't only seems to allow one definition of compensation for ABPT purposes. Would it comply with the X-testing rules to add the ebars of each source together to determine the ebar for the ABPT or should the ABPT use only one definition of comp to calculate a total ebar? And if so, would it be based on the most liberal (since the salary deferral is the first entry date) or other? Any input is appreciated. Thanks.

Calendar Year Plan's service requirement for entry is 1 year of service. Entry date is defined as 1st day of month coincident or next following completion of eligibility requirement. Full time employee is hired on 1/2/13. Would the entry date be 1/1/14 or 2/1/14? Thanks.