Quarterly Contributions

[Andy the Actuary]

Facts:

(1) Calendar Year Plan; aggregate funding actuarial cost method in 2007; no credit balance; 8% interest

(2) 2007 minimum contribution determined 1/1/2007=100,000; adjusted to 12/31/2007=108,000

(3) 2008 minimum contribution determined as of 1/1/2008 under PPA:

(a) 92,000

(b) 140,000

Is first quarterly installment under 3(a) 25% of the lesser of 108,000 or 90% of 92,000 = 20,700?

Is first quarterly installment under 3(b) 25% of the lesser of 108,000 or 90% of 140,000 = 27,000?

Should we be using 108,000 or 100,000?

Should 20,700 and 27,000 be adjusted upward for interest at the "effective" rate or are all of the interest adjustments included in a phantom 5th installment?

[mwyatt]

Having just gotten back from the EA meeting...

No guidance right now, although check back daily, words from IRS this morning at the Conversation with IRS seminar, as they know that 4/15 is closing in soon.

Will also say that:

1) Confirmed that in small plan ok to not use pre-retirement decrements for 430 funding

2) If you have a new plan with no pre-participation service, your Effective Interest Rate isn't 0% (since no FT). An anomaly, reasonable to calculate on the TNC instead to get the rate for the first year.