AFTAP due date 9/30, not 10/1, right?

[AndyH]

I know this contradicts a recent ASPPA issuance, but 10/1 is too late as I understand it. Isn't this correct?

[Guest Not Amused]

At the MidAtlantic Actuarial meeting last week, Jim Holland was very clear that 10/1 was too late - certification had to bedone before 10/1.

[AndyH]

Thank you.

[david rigby]

Better than Jim Holland's opinion is the statute:

IRC 436(h)(2) includes "...before the first day of the 10th month..."

[mwyatt]

You of course are submitting your AFTAPs for atomic clock stamping, aren't you?

[Mike Preston]

After a lot of energy expended on this issue (remember that before the IRS came out with the last notice, we had resigned ourselves to the fact that it was physically impossible to provide an AFTAP before the valuation date - which meant that for any EOY valuations they would, perforce, be subject to the non-issuance of an AFTAP for 2008), I decided that the best course of action in many cases was to issue the AFTAP's on 10/1/2008 and to plan on issuing the required employee notice stating that accelerated payments [lump sums] were restricted for the balance of the year, along with some language indicating that the plan has already been provided with a certification which in the absence of negative feedback from the IRS or Congress before the end of the year provides the restriction on lump sums will be lifed on 1/1/2009.

In light of the late notice from the IRS that AFTAP's for EOY vals would even be allowable this year, and in light of the market melt down which pretty much guarantees that we will not be able to satisfy the IRS' requirements that a final AFTAP be done which doesn't involve a material modification, I just decided that the safest course of action for all plans was to bite the bullet and issue the Notice.

Note that it is not too late for others to do so, even if they have a purported AFTAP certification dated 9/30/2008 or earlier. In light of all that is uncertain about these things, even for those where the AFTAP was issued before 10/1 (for an EOY val, of course, since if it is a BOY val there is no question as to its validity) I can see a Plan Administrator determining that it is not prudent to rely upon such a certification and instead insist upon a Notice with a corresponding freeze on amendments and accruals (if the plan was in existence before 2004) and a restriction on accelerated payments in all cases.

I expect this position to be impractical for those who have a gazillion plans. My shop is considerably more boutique than many so I am enjoying the opportunity to discuss this with my clients (to the extent they want to delve into it).