2008 Assets For PBGC Premium Calculation

[Andy the Actuary]

Let's stick to a calendar year plan with January 1 valuation date for discussion.

It is clear that 2007 contributions made in 2008 are included in plan assets for determining the UVB. It is also clear that after 2008, prior year accrued contributions must be discounted to January 1. What is unclear (as my evidence will show) is whether or not 2007 contributions made in 2008 are discounted back to January 1, 2008.

ASPPA (No. 8-10) says "no." More important, instructions for completing the PBGC forms explicitly say "No" ("For Premium Payment years beginning in 2008, such prior year contribution are included without discounting"). Now, technical releases from both Deloitte and JP Morgan say "Yes." More important, I do not see in PBGC regs. that there is a discount exclusion for 2008.

Frankly, an exclusion for 2008 seems totally inconsistent with how the PBGC has historically treated accrued contributions for premium calculation purposes. On the other hand, the PBGC may be serving grace to those end-of-year valuations.

Will someone with fresh batteries in his flashlight please shed some light on this dilemma?