What Is Quarterly Contribution

[Andy the Actuary]

In 2008, calendar year plan was 99% funded so quarterly contributions apply for 2009. 2008 minimum was $400,000. Plan sponsor indicated will make contribution on 9/15/2009. FT on 2009 is $3 million; Assets on 1/1/2009 are $3 million, excluding $400,000 accrued contribution. TNC 2009 = $360,000. 2009 contribution is $0 when discounted 9/15/2009 contribution is included in assets.

Minimum quarterly contribution is lesser of $400,000 and $0, so quarterly contribution is $0. Or is it? For purposes of determining quarterly contribution, can you include contributions that have been accrued but not yet made? That is, should quarterly contribution due 4/15/2009 be $90,000 rather than $0?

[SoCalActuary]

In 2008, calendar year plan was 99% funded so quarterly contributions apply for 2009. 2008 minimum was $400,000. Plan sponsor indicated will make contribution on 9/15/2009. FT on 2009 is $3 million; Assets on 1/1/2009 are $3 million, excluding $400,000 accrued contribution. TNC 2009 = $360,000. 2009 contribution is $0 when discounted 9/15/2009 contribution is included in assets.

Minimum quarterly contribution is lesser of $400,000 and $0, so quarterly contribution is $0. Or is it? For purposes of determining quarterly contribution, can you include contributions that have been accrued but not yet made? That is, should quarterly contribution due 4/15/2009 be $90,000 rather than $0?

You did not discuss the offset items. What PFB or COB are you applying? This will have an impact on your funding ratio for quarterly contributions.

Until the receivable is made and elections documented, your PFB or COB is not complete.

[Andy the Actuary]

I did not discuss COB and PFB because there are none. Assume COB, if any, was burned 1/1/2008. There are no excess contributions for 2008.

So, with that in mind, can 2008 accrued contribution be used to to determine 2009 minimum for all purposes even though 2008 contribution made 9/15/2009. Or, for purpose of determining 2009 minimum to determine 2009 quarterly, does 2008 accrued contribution have to be made prior to 4/15/2009?

[tymesup]

I think the only sensible approach is determine the minimum, determine the quarterly, determine if you satisfied the quarterly requirements.

Since you don't know what the quarterly is at the time it is due, you don't know whether you made it, you don't know whether the employer missed it on account of inability to make it, so you make a meaningless disclosure to the PBGC.

PPA, the gift that just keeps on giving.

[Andy the Actuary]

To your point: I don't know anything. Wholeheartedly concur!

[Mike Preston]

The IRS is on record as saying that the determination of the exact quarterly contribution requirement may not be possible as of any quarterly due date. The fact that it isn't knowable doesn't stop the interest uptick from applying. Similarly, if the resultant quarterly is zero, then it *was* zero as of each quarterly contribution date.