Credit balance / pre-funding balance

[FAPInJax]

It is my understanding that a plan sponsor must have an 80% funding percentage to use the credit balance / pre-funding balance (whether to satisfy the minimum required contribution OR the quarterly contributions). Is the calculation of this percentage as follows:

(Actuarial value of assets - pre-funding balance) / Funding target

I believe that is correct but can not currently find the cite to verify it.

Thanks in advance for any and all help!

[Guest Mike Melnick]

It looks tlike the assets are are offset by just the pre-funding balance, as you state.

The relevant Code sections are 430(f)(3) and 430(f)(4).

[FAPInJax]

Thanks. I could not find those cites. My eyes must be glazing over!