End of year valuations

[jkdoll2]

How many people still do EOY valuations for DB plans? What are you doing for the 2008 plan year on EOY vals? What about the AFTAP's that have to be done by 4/1/09?

It is a real headache to switch them to BOY. Is that something you see we will be having to do? All of our plans are under 100 participants.

Just wanted other peoples comments on this. I hear so much about BOY valuations - and I dont know how other TPA's or firms are handling EOY valuations. Thanks

[Effen]

Well Hello "jk", welcome to the party ... glad you could make it.

If you do a quick search for EOY valuations you will find lots of dialogue. Problem is, it is just complaining because there aren't really any solutions. The Code says you can do EOY vals, but apparently isn't clear enough for the IRS to write Regulations without technical corrections, which at this point don't appear to be on our hard working congressmen's (and congresswomen's) agenda. They would rather concern themselves with election year politics, because let’s be serious, stopping all progress long enough for you to climb over and beat down the other guy is really more important than pension legislation anyway.

Anyway, the IRS has permitted us to change to BOY for 2008, then MAYBE back to EOY for 2009. As you pointed out, this isn't really of any value to most people. Hence Blinky's poll. A similar poll was run on the COPA website w/ around 75% of the actuaries stating they plan to use the "good faith" approach and certify 1/1/08 AFTAPs based on 12/31/07 valuations. From a practical standpoint I see very little danger in this, other the Jimmy Holland saying he doesn't approve. Your 12/31/07 RPA CL will almost certainly be greater than your 1/1/2008 Funding Target, so using it to certify would be conservative? What argument could the IRS possibly use against it?

With special thanks to AtA: The material provided and the opinions expressed in this post are for general informational purposes only and should not be used or relied upon as the basis for any action. You should obtain appropriate tax, legal, or other professional advice.

[tymesup]

jk - Note there is an AFTAP due before 10/1/08.