yield curve & election months

[HiVi]

The EP News released by IRS on March 31st states that using yield curve and any of the lookback months for 2009 plan year is considered a reasonable interpretation of the statue and will not be challenged. My recollection is that the yield curve can be used only for the purposes of minimum required contribution. Does it mean the election to use yield curve applies only for the calculation of MRC? And for AFTAP purposes such as benefit restriction, we still need to use segment rates (if segment rates are what was adopted for the 2008 plan year)?

[SoCalActuary]

I disagree.

If you use the full yield curve for your 2009 valuation, it determines the funding target for 430 purposes. But the same FT is used for the AFTAP. If elected, it is used for PBGC premiums.

[HiVi]

Thanks for the reply, SoCalActuary. But does Code Section 430(h)(2)(D)(ii) say that the election of the yield curve applies only for the purposes of determining minimum required contribution? Am I missing the point? Thanks.

[HiVi]

Are there any comments regarding my quote - Code Section 430(h)(2)(D)(ii) says that the election of the yield curve applies only for the purposes of determining minimum required contribution? Does it mean it applies only for minimum required contribution? Benefit restriction is under 436 and does that mean we need to revert it back to segment rates (if segment rates were used for the prior year valuation) for 436 purposes? Thanks.

[Guest Grant]

Thanks for the reply, SoCalActuary. But does Code Section 430(h)(2)(D)(ii) say that the election of the yield curve applies only for the purposes of determining minimum required contribution? Am I missing the point? Thanks.

HiVi, I went and read that Section, and a lump formed in my throat, and terror filled my heart.

However, reading over 430, it seems that all the calcs. that go into the MRC, such as target liability, TNC, are derived from some interest rate, and it does not appear that there is a different definition of liability for purposes of FTAP vs. minimum anywhere. I have not reviewed the proposed regs again, but it seems they would have to have identified at some point whether "dueling" rates could co-exist for different purposes in the same year. Then again, maybe not, and the recent guidance is just one big "gotca"!

[HiVi]

Thanks for the input, Grant. Does anybody else care to comment? I sure hope we do not have different interest rate definitions for different purposes. PPA is already enough painful as it is.