does 77-2 apply to end of year valuation?

[himt4]

If a small plan freeze is effective 7/1/05 with 204h notice handed out 6/15/05, how may this be reflected for an end of year 12/31/05 valuation? Must you use the proration method by running one val with frozen benefits and the other val run as if no freeze was made, and prorate the two costs? Are you allowed to just run the val with the frozen benefits? Are you allowed to just run the val as if no freeze was made.

Somebody referred me to rev ruling 77-2 but that starts off by saying...

Rev. Rul. 77-2

The purpose of this Revenue Ruling is to provide guidelines for determining the charges and credits to be made to the funding standard account to reflect changes in benefits that become effective after the valuation date.

....which implies to me that 77-2 only offers guidlines for changes effective AFTER the valuation date and not changes made BEFORE the vauation date.

[david rigby]

Perhaps you want to reread Rev. Ruling 77-2, especially section 2.02 and section 3.

[himt4]

Yes, I read 2.02 and 3. But that does not get me anywhere if the first sentence of 77-2 is...

"The purpose of this Revenue Ruling is to provide guidelines for determining the charges and credits to be made to the funding standard account to reflect changes in benefits that become effective after the valuation date."

if taken literally, that first sentence says to me that everything below it isnt applicable to end of year valuations.

But if the conventional wisdom is that 77-2 also applies to end of year valuations, then let me know that.

[Guest Texas_Acty]

Rev Rul 77-2 is poorly worded, among other things, because it uses "valuation date" and "first day in the plan year" interchangably. However, the totality of Rev Rul 77-2 seems to set the key date as the first day of the plan year, not the valuation date. Look at the examples.