436-AFTAP Transition % requirements

[JAY21]

436(j)(3) discusses how the AFTAP transitional rule allows for plan years 2008-2010 to calc the FTAP without a reduction for the credit balance if greater than a certain transitional % instead of the normal 100% rule (2008=92%, 2009=94%,2010=96%), but ONLY if each preceding plan year was not less than the applicable percentage (emphasis added on this last part).

Was there anything in the technical correction bill (WRERA) that modfied and soften this "preceding plan years ALL must also be over the transitional % for those years" ?

I thought I remember something being modified on this preceding years requirement via technical corrections, but I could easily be wrong, or maybe there was something that only applied to shortfall gain/loss calculation. Thoughts/opinions appreciated. thanks.

[Andy the Actuary]

Here are WRERA changes:

(E) Section 436(j)(3) of the 1986 Code is amended—

(i) in subparagraph (A)—

(I) by striking ‘‘without regard to this paragraph

and’’,

(II) by striking ‘‘section 430(f)(4)(A)’’ and

inserting ‘‘section 430(f)(4)’’, and

(III) by striking ‘‘paragraph (1)’’ and inserting

‘‘paragraphs (1) and (2)’’, and

(ii) in subparagraph ©—

(I) by striking ‘‘without regard to this paragraph’’

and inserting ‘‘without regard to the reduction

in the value of assets under section 430(f)(4)’’,

and

(II) by inserting ‘‘beginning’’ before ‘‘after’’ each

place it appears.

Paragraph © describes the limitation and WRERA does not appear to change it. Here is 436(j)(3)© after the changes (better check me):

Subparagraph (B) shall not apply with respect to any plan year beginning after 2008 unless the funding target attainment percentage (determined without regard to the reduction in the value of assets under Section 430(f)(4)) of the plan for each preceding plan year beginning after 2007 was not less than the applicable percentage with respect to such preceding plan year determined under subparagraph (B).

[Guest AP914]

I think there was some relief (from WRERA) on the exemption of creating a new shortfall base. If this what you are thinking of?

Definitely double check, as I am only going from memory, and it is Friday :-)