New RPA range

[Guest Chamelnix]

From what I can tell, JCWAA changed the RPA CL range from 90%-105% to 90%-120% for 2 years for DRC calculations, RPA minimum FFL calculations, and determination whether late quarterlies are required.

I currently have no plans that require DRCs, so I don't know exactly how they work (and hopefully will continue not to need to know). The RPA minimum change seems straightforward enough - when I do a 1/1/02 valuation I can use 120% of the weighted average to determine my minimum FFL. My question is regarding late quarterlies.

For plan years beginning in 2002, the determination whether quarterlies are required is based on the 2001 funded CL %. 412(m)(7)(A) seems to say I can recalculate my CL % for 2001 to determine if quarterlies are required for 2002. If I do this, how do I complete the 2001 Schedule B? What would I enter for RPA CL and RPA CL interest rate?

[david rigby]

The "recalculation" is only for the purpose of determining if you have a quarterly contribution this year. This does not change your entries for the Schedule B, unless the IRS tells us otherwise. They did not in the recent Enrolled Actuaries Meeting.

[Guest Chamelnix]

Thanks for the reply. So when I do a 2002 Schedule B, I may be reporting a 2001 funded current liability % of less than 100% on line 4a, no contributions made during the plan year, and no additional interest charge due to late quarterlies (unless the form or instructions change to reflect the new law). Correct?

[david rigby]

I think that is possible.

Any other opinions?