Change in 2008 Valuation Date

[carrots]

For a small plan, can I change the 2008 valuation date from 1/1/2008 (BOY) to 12/31/2008 (EOY) without seeking approval? See 1.430(g)-1

[Blinky the 3-eyed Fish]

No.

[Blinky the 3-eyed Fish]

Uh, I meant "yes". I am surprised nobody said anything.

[flosfur]

For a small plan, can I change the 2008 valuation date from 1/1/2008 (BOY) to 12/31/2008 (EOY) without seeking approval? See 1.430(g)-1

Yes. See Regs 1.430(g)-1(f)(4).

[tymesup]

Rev Proc 2000-40 gave automatic approval to change to a BOY val, under 412©(5)(A).

Proposed reg 1.430(g)-1(b)(2)(iv) says the val date is part of the funding method and may only be changed with the consent of the Commissioner.

Suppose a small plan was always EOY and wanted to change to BOY for 2009. Does the proposed reg trump the Rev Proc?

Suppose a small plan was always BOY and changed to EOY for 2008 pursuant to proposed reg 1.430(g)-1(f)(4). Assuming the Rev Proc is still viable, or the reg is ignored because it is only proposed, does the 2008 change prevent subsequent changes for five years?

[zimbo]

I believe the new reg trumps all past guidance. Seems like for 2008 we get a free ride on val dates, either BOY or EOY (subject to under 100 participants). After that we are sort of stuck unless IRS grants some sort of relief for 2009 for us to change again. The rumor is that they might consider such relief.

[Guest RBlaine]

Uh, I meant "yes". I am surprised nobody said anything.

I just read this and your first reply freaked me out since I had just told someone we could do this.

This isn't 'set in stone' until time to file the 2008 5500, correct? Suppose 01/01/2008 valuation was completed and the plan was so overfunded that the max contribution was smaller than the employer's wish. He now wants a larger contribution. Could he determine, at anytime before 9/15, that he wanted and EoY valuation done to, possibly, get a higher 2008 contribution?

[Blinky the 3-eyed Fish]

Yes, but be careful it doesn't change your AFTAP range. Then you have a material change and the harm that will befall you.

[Guest RBlaine]

Yes, but be careful it doesn't change your AFTAP range. Then you have a material change and the harm that will befall you.

Good, I thought I had screwed up.

[tymesup]

Perhaps there is a date somewhere in the year that provides the desired deduction without changing the AFTAP range. Good luck administering a middle of the year valuation.