PPA Funding

[Guest DBAnalyst123]

Hello,

I have a discussion with a consultant who thinks that segment rates to use for funding are the ones at the beginning of the plan year, wheras, I think that they are the ones as of the valuation date. Hence, for an EOY valuation, it would be that month end/next month segment rates (e.g. for 12/31/2008 Val, it could be 01/01/2009).

What are you using for the segment rates for EOY valuations?

Thanks.

[Mike Preston]

Calendar year plan with BOY val can use January YY (0 month lookback), December YY-1 (1 month look back), November YY-1 (2 month look back), October YY-1 (3 month lookback) or September YY-1 (4 month look back).

Calendar year plan with EOY val can use December YY (0 month lookback), November YY (1 month lookback).... August YY (4 month look back).

I do not agree that you can look forward in any manner (i.e., to the "next month".)

[Guest DBAnalyst123]

Calendar year plan with BOY val can use January YY (0 month lookback), December YY-1 (1 month look back), November YY-1 (2 month look back), October YY-1 (3 month lookback) or September YY-1 (4 month look back).

Calendar year plan with EOY val can use December YY (0 month lookback), November YY (1 month lookback).... August YY (4 month look back).

I do not agree that you can look forward in any manner (i.e., to the "next month".)

Great! Thanks! So, basically, you can have a look-back of up to 4 months. How/where is the look-back defined? Is it similar to the lookback regarding the 417(e) definition?

[david rigby]

See IRC 430(h)(2)(E)

from PPA section 112.