The January 2004 CL rate is:

[AndyH]

6.55%

http://www.ustreas.gov/press/releases/archives/200404.html

[Mike Preston]

Thanks, Andy.

[mwyatt]

The reference for "lookback" year states that to see if your plan is subject to quarterly contributions for 2004, that you can rerun the 2003 numbers under the new rate to see if the percentage goes over 100% (and hence exempt). So for example, a calendar year plan can rerun the 1/1/2003 CL using the interest rate of 7.11%. In the following paragraph, however, it states that the required amount for 2003 will continue to use the original 30-year rates. I presume what they mean in this situation is that you can't redo the charges/credits to the 2003 FSA based on revised CB CL.

Also, in looking at the Notice and also the RIA Checkpoint analysis, it appears that the rate for determining the variable rate premium has changed to the CB basis. However, the Notice states under Interim Guidance that this is the case, but doesn't explicitly state that fact elsewhere. Are we going to be able to calculate the 2004 variable premium on the December 2003 rate of 5.81% (since it states the rate in effect for the month preceding BOY)? Definitely would generate some better results over the original 4.31%!

CORRECTION: ASPA Asap received this morning stated that the PBGC variable rate premium will continue to be calculated on 85%, rather than 100% of CB rate. So instead of 5.81%, would use 85%, or 4.94%. Oh well, still better than 4.31%.

[MGB]

In the following paragraph, however, it states that the required amount for 2003 will continue to use the original 30-year rates. I presume what they mean in this situation is that you can't redo the charges/credits to the 2003 FSA based on revised CB CL.

That paragraph is not refering to the FSA. They are saying that you cannot redo the 2003 minimum required contribution calculation for use in the determination of the quarterly contributions in 2004. (I disagree with this according to the legislative language, but the IRS has spoken and we must follow.)

[AndyH]

I sent my two Senators that voted against this legislation very strongly worded emails and I would encourage others to do the same. Imagine if this had not passed?

[mwyatt]

So MGB, (and I think that this is what I thought) you CAN

1. recalculate the 2003 Current Liability using the new CB rates to see if the increase is enough to get you over the 100% threshold for quarterly contributions; but

2. assuming that you still are subject to Quarterlies, you stick with your existing 30-year CL calculations for determining the 2003 prior year contribution amount, ie, you can't create a "hypothetical" 2003 FSA using CB rates to determine the prior year amount.

Anyone have any idea when PBGC will issue the revised interest rates for variable rate premium in 2004 (I know I can multiply by .85, but you never know about some of the underlying math).

[david rigby]

AndyH,

The Senate website does not have the vote for the final bill. Do you have a link?

[AndyH]

I did, but it is gone. I'll see if I have another.

[Mike Preston]

mwyatt, the PBGC rate appears to be the rate in effect in the month immediately preceeding the plan year so instead of using the January rate of 5.68%, you use the December rate of 5.81%. Jeff Hartmann reminded me that the 5.81% is further multiplied by 85% resulting in 4.9385% (probably 4.94%).

[MGB]

Note there were two types of "no" votes. A very few were always against the bill from the beginning. Most of the 19 votes in the end were against it because they were posturing for a better multiemployer relief; not because they were against the bill (they wanted a stronger bill). They will now introduce new multiemployer relief legislation for a future pension bill.

[david rigby]

Here is the vote:

http://www.senate.gov/legislative/LIS/roll...ote=00068#state