Missed MRC

[Penman2006]

I have to do the 2005 valuation for a plan that did not make it's 2004 minimum required contribution. The 2004 5500 shows the missed payment as a contribution receivable. As yet the contribution has not been made and I doubt that it will be made anytime soon.

How is the missed contribution handled for the 2005 valuation assets? If it is omitted it would be like taking a double hit since there is already a funding deficiency attributable to the missed contribution, so carry it as a receivable?

[Effen]

For most of the FSA, a deficiency is like a negative credit balance. Be careful with the RPA AFC, where it is generally ignored.

I also suggest amending the 5500 since a deficiency is not the same as a contribution receivable. I assume the 2004 5500 Schedule B had a deficiency?

[david rigby]

If the contribution is late,

- it cannot be counted on either the Schedule B or the Schedule H/I;

- if the omitted contribution creates a funding deficiency, an excise tax (see IRS Form 5330) will be required;

- the deficiency becomes part of determining the next year's minimum required contribution (a negative credti balance, as stated by Effen).

In addition to the caution about the AFR/DRC, be careful about the quarterly contribution requirement for the current year.

[Penman2006]

I kind of thought I messed up including it on the Sch I as a receivable. I will amend that and that basically answers my other questions. Thanks for the helpful responses.