Deemed reduction in funding balances - 436(f)(3)

[carrots]

Assuming a calendar year plan, with an EOY valuation, and a very large COB:

Assume there is a deemed reduction in COB in 2008 in order to have an 80% AFTAP.

If the 2009 AFTAP is not certified by 3/31/2009 (or, even by 9/30/2009), I believe that there would be another deemed reduction to again get an 80% AFTAP, avoiding the presumed underfunding of 436(h).

Does this seem like a correct reading of 436(f)(3) and 436(h)?

[Blinky the 3-eyed Fish]

At 4/1/2009, if a 2009 AFTAP is not yet certified, the AFTAP will drop to 70%. If there is enough credit balances to bring the AFTAP to 80%, you are correct that there will be a deemed burn. I am not sure why you mention 9/30/09. After all if you don't certify the 2009 AFTAP by then, then the plan is presumed to be under 60% and no amount of burn can get it to 60%.

One other note. The way I understand it, and chime in if you have a different opinion, is that when calculating how much credit balances need to be burned due to the 4/1/09 reduction to 70%, you prepare the presumed funding target calculation using 1/1/09 asset information.

Final regs coming soon? They may change some of this.