2008 Minimum Funding

[zimbo]

I need some clarification on the uses of the phase-in percentages for 2008. Am I correct that for plans that were not under Deficit Reduction for 2007, the phase in of 92% is used in the following circumstances?:

1. In determining whether to subtract credit balances from assets for Benefit Restriction purposes, if the plan is 92% funded then you do NOT subtract the credit balances.

2. However in determining the funded percentage of the AFTAP for Benefit Restriction purposes, you do NOT use the 92% phase in.

3. In determining whether to set up a shortfall base, no base is established if the adjusted assets are at least 92% of the Funding Target (generally this is the accrued liability under projected unit credit method).

4. Once it is determined that a shortfall base is to be set up, amount of the base (the funding shortfall) is 100% of the funding target less adjusted assets. IN other words, you do NOT use the 92% phase in once it is determined that a shortfall base is to be set up.

Comment? Corrections?

[SoCalActuary]

Item 3 - One small problem: The Funding Target is not based on projected unit credit. It uses Accrued Benefit funding.

Only the Funding Target Surplus (50% of the Funding Target) can use projected salary increases.