DB Deduction Rules

[SoCalActuary]

I thought Relius had the new deduction rules built into the DB system, but I can't find the report.

Where does it show that the unfunded current liability is deductible?

Does it require 100 lives? Is there a plan spec parameter that must be coded?

[Dennis Povloski]

If you go into plan specs, under the Actuarial Methods page, there is a tab for Cost Methods. The second to last entry on the left hand side is "Maximum Deduction uses IRC 404(a)(1)(d)?" and you have to code this as "Yes - Override". Then it will calculate the unfunded current liability and compare that to the maximum deductible contribution, and give you the larger of the two.

There is a just plain old "yes" entry in the drop box, but I can't figure out why this doesn't work for me. It is possible that if you just check "yes" that it will only work with plans of over 100 lives, but we only use Relius for our small plans, so I haven't been able to verify this. It's my understanding that under the current rules, this now applies to all plans regardless of the number of lives.

On the output, this shows on the Contribution Analysis report. The contribution is the calcualted max contribution. RPA Current Liability Floor is your unfunded current liability. Maximum Deductible Contribution is the larger of the two.

We are still on Relius 9.1, so I'm not sure what changes have been made in later updates, but I hope this helps.

[SoCalActuary]

Can't find it.

We have Version 10.0.4 and I don't see that item on the plan specification.

Tried to look up the Help items for Maximum Deduction, 404(a)(1)(d), and RPA Current Liability to no luck.

Any other ideas?

How about a sample output report to attach to your response?

[FAPInJax]

The Yes/No choices are system set values. The system will determine whether the over 100 participants exist for purposes of the application of the rule. The other 2 choices Yes - override and No - override are for the user to control whether the deduction rule is implemented.

The deduction is printed on the the 5th page of the Analysis report in the 404 contribution section.

[SoCalActuary]

Thank you Frank. I guess I was just looking at the wrong part of that screen.

It works great.