Terminating Plan & Change of Val Date to BOY

[flosfur]

The only funding method change, under Rev Proc 2000-40, for the year of plan termination is per section 4.02.

A question about the sufficiency of assets (exclusive of receivable contributions) @ plan termination date - section 4.02(3)(a):

For a calendar year plan, @ 1/1/2004 plan assets are $200k Vs PVABs of $150k.

Assume the plan is terminated 11/30/2004 by which time the participants would have accrued an additional year benefits

Without the additional 2004 accruals, @ 11/30/04 assets are $210k Vs PVAB of $158k - nothing yet has been contributed for 2004. However, with the additional accruals in 2004, PVAB jumps to $225. The sponsor would be contributing $25k (min required) for 2004 after 11/30/04 and may be as late as 9/15/05 say. Is the $25k excluded from the assets for determining sufficiency of assets for section 4.02? It doesn't seem right if the additional accruals are to be taken into account but not the contributions payable!

Assuming one can ignore the 2004 accruals and contribution paybale for 2004 for sufficiency of assets ....

The plan is amended (at the same time as the plan termination) to increase the benefit accruals effective 1/1/2004. As a result of the amendment, PVAB @ 1/1/2004 jumps to $218k Vs assets of $200k (and jum)and . Does this violate the sufficiency of assets condition of section 4.02?

[flosfur]

The only funding method change, under Rev Proc 2000-40, for the year of plan termination is per section 4.02.

A question about the sufficiency of assets (exclusive of receivable contributions) @ plan termination date - section 4.02(3)(a):

For a calendar year plan, @ 1/1/2004 plan assets are $200k Vs PVABs of $150k.

Assume the plan is terminated 11/30/2004 by which time the participants would have accrued an additional year benefits

Without the additional 2004 accruals, @ 11/30/04 assets are  $210k Vs PVAB of $158k - nothing yet has been contributed for 2004.  However, with the additional accruals in 2004, PVAB jumps to $225. The sponsor would be contributing $25k (min required) for 2004 after 11/30/04 and may be as late as 9/15/05 say.  Is the $25k excluded from the assets for determining sufficiency of assets for section 4.02? It doesn't seem right if the additional accruals are to be taken into account but not the contributions payable!

Assuming one can ignore the 2004 accruals and contribution paybale for 2004 for sufficiency of assets ....

The plan is amended (at the same time as the plan termination) to increase the benefit accruals effective 1/1/2004.  As a result of the amendment, PVAB @ 1/1/2004 jumps to $218k Vs assets of $200k (and jum)and .  Does this violate the sufficiency of assets condition of section 4.02?

No one has any input on this question?

[david rigby]

Without the additional 2004 accruals, @ 11/30/04 assets are $210k Vs PVAB of $158k - nothing yet has been contributed for 2004.

Who cares about the analysis without additional accruals?

I think 4.02 is pretty clear. "As of the date of termination", not as of the valuation date.