When are quarterlies required for 2009 plan year?

[dmb]

I have heard Jim Holland state and now i've heard someone else say that if the plan's 2008 FTAP is at least 92% quarterly contributions are not required for the 2009 plan year. I can not find any cite that applies the transitional funding levels (92%, 94%...) to the definition of funding shortfall for quarterly purposes, only for the exemption of shortfall amortization charge (and also in 436). Does anyone have a cite that says the transitional levels can be applied to the FTAP for quarterly requirement?? Thanks.

[Blinky the 3-eyed Fish]

You heard wrong.

[dmb]

You heard wrong.

Jim Holland said it at the ASPPA Norhteast Bfts Conference in NYC three weeks ago and Larry Deutsch said it in his ASPPA webcast yesterday afternoon. Larry Deutsch said it was part of technical corrections, but i still don't see it.

[Andy the Actuary]

Your search for the written word is right on: You cannot advise your clients based upon hearsay, irrespective of how much respect we may have for the speaker. Are there written or taped transcripts of the meeting you attended? Have you emailed JH to indicate you believed you heard him say blah blah blah and would he confirm and articulate his basis? There is a long distance between a speech and law, especially a speech given by another practitioner (Deutsch).,

[dmb]

Your search for the written word is right on: You cannot advise your clients based upon hearsay, irrespective of how much respect we may have for the speaker. Are there written or taped transcripts of the meeting you attended? Have you emailed JH to indicate you believed you heard him say blah blah blah and would he confirm and articulate his basis? There is a long distance between a speech and law, especially a speech given by another practitioner (Deutsch).,

I agree and i wasn't the only one questioning Mr. Holland. He was trying to find the cite but didn't want spend the conference time. I e-mailed ASPPA recently to ask if this issue was ever resolved and have yet to receive a response. I was also going to e-mail Larry Deutsch.

[Andy the Actuary]

A+ for homework even though status is still "wishful thinking."

[dmb]

Turns out that Mr. Holland and Mr. Deutsch are doing a session together at teh ACOPA actuarial symposium next week in Chicago. Should be interesting. Hopefully this issue will be resolved then.

[Guest Dressageho]

Turns out that Mr. Holland and Mr. Deutsch are doing a session together at teh ACOPA actuarial symposium next week in Chicago. Should be interesting. Hopefully this issue will be resolved then.

We've also discussed this option with people who work with Larry. If you hear any updates, please post them.

[Effen]

We've also discussed this option with people who work with Larry.

... and what did they say?

[Mike Preston]

I don't know what "they" said, but I can tell you the source of the confusion.

Let me start by saying that I agree with the other posters here and think the written word is clear enough.

However, those who think differently, as Larry seems to at the present time, base their position on the fact that WRERA made a change to 430©(5)(B)(i) such that the funding shortfall being determined is for both paragraphs 3(A) and subparagraph (A). Pre-WRERA 430©(5)(B)(i) only referred to subparagraph (A).

Now, 3(A) refers directly to the "funding shortfall" (not the shortfall amortization base).

Hence, if the new rule as to when to use the transition percentage is applied not only to subparagraph (A) [how to determine the shortfall amortization base] but also applied to paragraph 3(A), which says: "the funding shortfall of such plan for such plan year, minus" you have a confusion which is generated from the question: why wasn't 430©(5)(B)(i) changed to reference paragraph 3, rather than paragraph 3(A)? That is, it must mean something different from what it would mean if the change had merely said paragraph 3 [in addition to the previous and remaining reference to subparagraph (A)].

Now, before you jump down my throat for this, please be aware this isn't my interpretation. I think that if this interpretation were to be correct, the change in WRERA would have had to be to paragraph 4, not 3(A) or 3, for that matter.

And since I think paragraph 4 controls the definition of shortfall for purposes of 430(j)(3)(A), I think the above argument is weak indeed.

But at least we now know the source of the confusion.

Hopefully, Jim Holland and Larry will address this later this week in Chicago at the ASPPA COPA Symposium.

[Mike Preston]

They did and they both now agree that the threshold for determining whether a quarterly is required is always 100%.

[Guest RBlaine]

Thanks for the update, Mike!!!