Amortization bases

[FAPInJax]

A plan has one amortization base prior to running the valuation:

412 balance

2,955

404 balance

1,912

Credit balance 1,043

So far everything is in balance.

The valuation is run and the unfunded accrued liability is negative (approximately $1,000 if it makes a difference).

IF the expected unfunded liability is 1,912, what should the gain/loss base be for the current year??

[david rigby]

Since you state 412 and 404, let's assume this is an ERISA plan. Let's also assume the Reconciliation Account = zero. Generic: set your actual unfunded to zero (per Rev. Ruling 81-213, sec. 5.01), and create a gain/loss base of whatever is needed to balance.

Have I misunderstood your question?

[FAPInJax]

Since you state 412 and 404, let's assume this is an ERISA plan. Let's also assume the Reconciliation Account = zero. Generic: set your actual unfunded to zero (per Rev. Ruling 81-213, sec. 5.01), and create a gain/loss base of whatever is needed to balance.

Have I misunderstood your question?

No. I agree the actual unfunded is zero. The question is really is what happens to the other bases (both 404 and 412) especially the credit balance (is it lost??).

IF I attempt to follow your lead:

Set the gain/loss equal to 1912. This causes the 404 to net to zero AND the 412 amortization bases to NOT net to zero until the credit balance is invoked.

Right?

[david rigby]

Your credit balance does not evaporate. In many cases after FF, the loss base will = the CB.

I apologize if that is not what you asked.