PBGC Schedule A

[Guest MikeMiller]

I have a client that is subject to the variable rate premium. I have calculated this premium under the General Rule using assets as of 6/30/2001 and vested benefits valued at 4.82% (Premium Payment Year = 7/1/2001 - 6/30/2002) as of 6/30/2001. I have also calculated the premium using the ACM (for plans with > 500 participants) using vested benefits as of 7/1/2000 and assets as of 7/1/2000.

Both of these methods produce a significant premium. Do I have any other options?

[david rigby]

Sort of.

Looks like you have exhausted the possibilities for calculating the liabilities. You can modify the calculation of the assets in two ways:

1. Have the sponsor put in additional $ for the prior year and discount it back to 7/1/01 (oh wait, you are already past the March 15 due date for contributions so that won't work).

2. Modify your determination of actuarial value of assets for the prior plan year. Recall that to calculate the asset at 6/30/2001, you have to use the method of calculating the actuarial value of assets in effect at 7/1/2000. If you can modify that, assuming the Schedule B has not been filed, then you can (must) use that technique at 6/30/2001. Thus, this does not work if you change your asset method at 7/1/2001.